Law of Property (Amendment) Act 1924

Section 5.

FIFTH SCHEDULE Trustees

PART I Amendments

Investments.

1 (1) The following paragraph shall be substituted for paragraph (d) of section one of the Act of 1893 :—

“(d) In India Seven, Five-and-a-half, Four-and-a-half, Three-and-a-half, Three and Two-and-a-half per cent. Stock, or in any other capital stock which may at any time be issued by the Secretary of State in Council of India under the authority of Act of Parliament, and charged on the revenues of India, or any other securities the interest in sterling whereon is payable out of and charged on the revenues of India.”

(2) Paragraphs (i) and (k) of the said section one shall have effect and be deemed always to have had effect as if after the word “company” in each of those paragraphs there had been inserted " owning or operating a railway. "

Bearer securities.

2 The following section shall be substituted for section seven of the Act of 1893 :—

“7 (1) A trustee may, unless expressly prohibited by the instrument creating the trust, retain or invest in securities payable to bearer which, if not so payable, would have been authorised investments:

Provided that securities to bearer retained or taken as an investment by a trustee (not being a trust corporation) shall, until sold, be deposited by him for safe custody and collection of income with a banker or banking company.

A direction that investments shall be retained or made in the name of a trustee shall not, for the purposes of this subsection, be deemed to be such an express prohibition as aforesaid.

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

Power to sell by auction, &c., and to give valid receipts.

3 (1) Subsection (3) of section thirteen of the Act of 1893 is hereby repealed.

(2) The following subsection shall be inserted at the end of section twenty of the Act of 1893:—

“This section applies notwithstanding anything to the contrary contained in any instrument creating the trust.”

(3) The said section twenty as amended by this paragraph shall have effect subject to the statutory restrictions on the power for a sole trustee, not being a trust corporation, to give valid receipts.

Power to compound, &c.

4 The powers conferred by subsection (2) of section twenty-one of the Act of 1893 shall be extended so as to include a power—

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

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

Power to raise money.

5 (1) The words “for the time being in possession ” shall be inserted at the end of subsection (1) of section one hundred and twenty-two of the principal Act, and that subsection applies notwithstanding anything to the contrary in the instrument creating the trust.

(2) The words “to trustees of property held for charitable ” purposes, or to “shall be inserted after ” apply " in subsection (2) of the same section.

Devolution of trusts and powers.

6 Section twenty-two of the Act of 1893 shall apply to trusts whenever constituted, and shall take effect subject to the restrictions imposed in regard to receipts by a sole trustee not being a trust corporation.

Audit.

7 In subsection ,(7) of section one hundred and twenty of the principal Act the words “examined or ” shall be inserted after “accounts of the trust property to be ” and the words “examination or ” shall be inserted after " costs of such. "

Powers to delegate.

8 The following sections shall be inserted at the end of Part IV. of the principal Act—

“127A (1) A trustee intending to remain out of the United Kingdom for a period exceeding one month may, notwithstanding any rule of law or equity to the contrary, by power of attorney, delegate to any person, including a trust corporation, the execution or exercise during his absence from the United Kingdom of all or any trusts, powers and discretions vested in him as such trustee, either alone or jointly with any other person or persons:

Provided that a person being the only other co-trustee and not being a trust corporation shall not be appointed to be ah attorney under this .subsection.

(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 the United Kingdom, and shall be revoked by his return.

(4) The power of attorney shall be attested by at least ohe witness, and shall be filed at the Central Office within ten days after the execution thereof with a statutory declaration by the donor that he intends to remain out of the United Kingdom for a period exceeding one month from the date of such declaration, or from a date therein mentioned.

(5) The execution of such instrument and statutory declaration shall be verified in such manner as is required by statute in the case of powers of attorney filed at the Central Office.

(6) If the power of attorney confers a power to dispose of or deal with land or a charge registered under the Land Transfer Acts, an office copy shall be filed at the land registry.

(7) The statutory declaration aforesaid and a statutory declaration by the donee of the power of attorney that the power has come into operation and has not been revoked by the return of the donor shall be conclusive evidence of the facts stated in favour of any person dealing with the donee.

(8) 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 become revoked by the act of the donor or by his death 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 executed

(9) For the purpose of executing of exercising the trusts or powers delegated to him, the donee may exercise any of the powers conferred on the donor by statute or by the instrument creating the trust, including power, for the purpose of the transfer of any inscribed stock, himself to delegate to an attorney the power to transfer but not including the power of delegation conferred by this section.

(10) 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 stock 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 stock is inscribed or registered with any notice of the trust.

(11) In this section 'trustee' includes a tenant for life and a statutory owner.

127B A trustee or personal 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 particular 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.”

Maintenance.

9 In subsection (3) of section eighty-eight of the principal Act, the words “if the income available is sufficient and subject ” to any rules of the court to the contrary “shall be inserted before ” be five pounds. "

Appointments of trustees.

10 (1) In subsection (5) of section one hundred and ten of the principal Act the words “intending to renounce or all the executors where they all intend to renounce ” shall be inserted after " last surviving executor. "

(2) The following subsection shall be inserted at the end of section ten of the Act of 1893—

“(7) Where a lunatic or defective, being a trustee, 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 the continuing trustees or trustee under this section unless leave has been given by the Judge or Master in Lunacy to make the appointment.”

(3) In subsection (1) of section one hundred and eleven of the principal Act, the words “or that he is not entitled to a ” beneficial interest in the trust property in possession “shall be inserted after ” acting. "

Jurisdiction in regard to lunatics.

11 Subsections (2) (3) and (5) of section two of the Lunacy Act, 1922, in regard to trustees shall be read as follows:—

“Where the High Court has power under the Trustee Acts to make orders in relation to lunatics and defectives who are trustees, the Judge or Master in Lunacy shall, save as provided in this section, have no power to make such an order:

Provided that where—

(a) a lunatic or defective has become a trustee of mortgaged property merely by reason of the mortgage having been paid off ; or

(b) an order in lunacy is made authorising the exercise of a power to appoint a trustee; or

(c) an order in lunacy is made for giving effect to a contract made before the lunatic or defective was under disability; or

(d) a lunatic or defective is beneficially entitled to-some interest in the property but holds the-property or some interest therein under- an express implied or constructive trust;

the High Court and the Judge or Master in Lunacy shall, subject to and in accordance with rules made by the Lord Chancellor, have concurrent jurisdiction.”

Application to Settled Land Act Trustees.

12 (1) All the powers and provisions contained in the Act of 1893, with reference to the appointment of new trustees, and the discharge and retirement of trustees, shall apply to and include trustees for the purposes of the Settled Land Acts, and for the purpose of the management of land during a minority, whether such trustees are appointed by the court or by the settlement, or under provisions contained in any instrument.

(2) Where, either before or after the commencement of the principal Act, trustees of a settlement have been appointed by the court for the purposes of the Settled Land Acts, then, after the commencement of that Act—

(a) the person or persons nominated for the purpose of appointing new trustees by the instrument, if any, creating the settlement though no trustees for the purposes of the Settled Land Acts were thereby appointed; or

(b) if there is no such person, or no such person able and willing to act, the surviving or continuing trustees or trustee for the time being for the purposes of the Settled Land Acts or the personal representatives of the last surviving or continuing trustee for those purposes ;

shall have the statutory powers to appoint new or additional trustees of the settlement for the purposes of the Settled Land Acts.

(3) Appointments of new trustees for the purposes of the Settled Land Acts made or expressed to be made before the commencement of the principal Act by the trustees or trustee or personal representatives referred to in sub-paragraph (2) (6) of this paragraph or by the persons referred to in sub-paragraph (2) (a) of this paragraph are, without prejudice to any order of the court made before such commencement, hereby confirmed.

(4) The foregoing provisions of this paragraph shall have effect in substitution for section forty-seven of the Act of 1893.

The Crown.

13 The Act of 1893 as amended shall bind the Crown.

PART II Provisions for Facilitating Consolidation of the Law Relating to Trustees

Supplementary powers of investment.

1 In subsection (2) of section one hundred and nineteen of the principal Act the words “or subdemise ” shall be inserted after “demise ” and the words “less a nominal reversion when by subdemise ” shall be inserted after " of not less than five hundred years. "

Protection against liability for rents, &c.

2 (1) Where a personal representative or trustee liable as such for—

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

(b) any rent, covenant or agreement payable under or contained in any grant made in consideration of a rentcharge; or

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

satisfies all liabilities under the lease or grant which may have accrued, or been claimed up to the date of the conveyance hereinafter mentioned, 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 personal 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 personal 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 paragraph 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 respectively distributed; and applies notwithstanding anything to the contrary in the will or other instrument, if any, creating the trust.

(3) In this paragraph “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, reservation, or otherwise, and includes an agreement for a grant and any instrument giving any such indemnity as aforesaid or varying the liabilities under the grant, and “lessee ” and “grantee ” include persons respectively deriving title under them.

(4) The provisions of this paragraph shall have effect in substitution for sections twenty-seven and twenty-eight of the Law of Property Amendment Act, 1859, as amended by section one hundred and seventeen of the principal Act.

Protection by means of advertisements.

3 It is hereby declared that section twenty-nine of the Law of Property Amendment Act, 1859, as amended by section one hundred and eighteen of the principal Act, does not relieve the trustees or personal representatives from any obligation to make searches or obtain official certificates of search similar to those which an intending purchaser would be advised to make or obtain, and that the said section twenty-nine as so amended applies notwithstanding anything to the contrary in the will or other instrument, if any, creating the trust.

Advancement.

4 The following subsection shall be substituted for subsection (1) of section one hundred and twenty-one of the principal Act:—

“(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 manner as they may, in their absolute discretion, think fit, of any person entitled 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 under 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, interest of such person is liable to be defeated by the exercise of a power of appointment or revocation, or to be diminished by the increase of the .class to which he belongs :

Provided that—

(a) the money so paid or applied for the advancement or benefit of any person shall not exceed altogether in amount one-half of the presumptive or vested share 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 interest, whether vested or contingent, in the money paid or applied unless such person is in existence and of full age and consents in writing to such payment or application.”

Appointments of trustees.

5 (1) The following paragraphs shall be substituted for paragraphs (c) and (d) of subsection (2) of section one hundred and nine of the principal Act.

“(c) Appointments of new trustees of conveyances on trust for sale on the one hand and of the settlement of the proceeds of sale on the other hand, shall, subject to any order of the court, be effected by separate instruments, but in such manner as to secure that the same persons shall become the trustees of the conveyance on trust for sale as become the trustees of the settlement of the proceeds of sale.

(d) Where new trustees of a settlement are appointed, a memorandum of the names and addresses of the persons who are for the time being the trustees thereof for the purposes of the Settled Land Acts, shall be endorsed, on or annexed to the last or only principal vesting instrument by or on behalf of the trustees of the settlement, and such vesting instrument shall, for that purpose, be produced by the person having the possession thereof to the trustees of the settlement when so required.”

(2) In subsection (1) of section ten of the Act of 1893, after the words “other persons ” the words “whether or not being the persons exercising the power ” shall be inserted.

(3) Subsection (2) of section ten of the Act of 1893 shall have effect as if the word “new ” where that word first occurs were omitted therefrom.

(4) Nothing in the Trustee Acts shall authorise the appointment of a sole trustee not being a trust corporation, where the trustee, when appointed, would not be able to give valid receipts for all capital money arising under the trust.

Vesting orders of land.

6 (1) In any of the following cases, namely :—

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

(ii) Where a trustee entitled to or possessed of any land or interest therein (whether by way of mortgage or otherwise), or entitled to a contingent right therein, either solely or jointly with any other person—

(a) is under disability, or

(b) is out of the jurisdiction of the High Court, or

(c) cannot be found, or, being a corporation, has been dissolved:

(iii) Where it is uncertain who was the survivor of two or more trustees jointly entitled to or possessed of any interest in land:

(iv) Where it is uncertain whether the last trustee known to have been entitled to or possessed of any interest in land, is living or dead :

(v) Where there is no personal representative of a deceased trustee who was entitled to or possessed of any interest in land, or where it is uncertain who is the personal representative of a deceased trustee who was entitled to or possessed of any interest in land :

(vi) Where a trustee jointly or solely entitled to or possessed of any 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 interest or a release of the right, to convey the land or interest or to release the right, and has wilfully refused or neglected to convey the land or interest or release the right for twenty-eight days after the date of the requirement:

(vii) Where land or any 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 vesting the land 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:

Provided that—

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

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

(2) The foregoing provisions of this paragraph shall have effect in substitution for section twenty-six of the Act of 1893 as amended by any subsequent enactment, and the expression ''vesting order" in the Act of 1893 shall be construed as meaning an order made under this paragraph.

Vesting orders of stock and things in action.

7 (1) In any of the following cases, namely :—

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

(ii) Where a trustee entitled (whether by way of mortgage or otherwise) alone or jointly with another person to stock or to a thing in action—

(a) is under disability; or

(b) is out of the jurisdiction of the High Court; or

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

(d) 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 direction 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

(e) 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 :

(iii) Where it is uncertain whether a trustee entitled alone . or jointly with another person to stock or to a thing in action is alive cr dead :

(iv) Where stock is standing in the name of a deceased person whose personal representative is under disability:

(v) Where 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 a thing in action, in any such person as the court may appoint:

Provided that—

(a) Where the order is consequential on the appointment of a trustee, the right shall be vested in the persons who, on the appointment, are the trustees :

(b) Where the person whose right is dealt with by the order 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.

(2) In all cases where a vesting order can be made under this paragraph, the court may, if it is more convenient, appoint some proper person to make or join in making the transfer :

Provided 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.

(3) 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 the Trustee Acts, may transfer the stock to himself or any other person, according to the order, and the Banks of England and Ireland and all other companies shall obey every order under this paragraph according to its tenor.

(4) After notice in writing of an order under this paragraph it shall not be lawful for the Bank of England or of Ireland or any other company to transfer any stock to which the order relates or to pay any dividends thereon except in accordance with the order.

(5) The court may make declarations and give directions concerning the manner in which the right to any stock or thing in action vested under the provisions of the Trustee Acts is to be exercised.

(6) The provisions of the Trustee Acts as to vesting orders shall apply to shares in ships registered under the Acts relating to merchant shipping as if they were stock.

(7) The provisions of this paragraph shall have effect in substitution for section thirty-five of the Act of 1893 as amended by any subsequent enactment.

Orders conclusive evidence.

8 The following section shall be substituted for section forty of the Act of 1893 :—

“40 Where a vesting order is made as to any land under this Act or under the Lunacy Act, 1890 (as amended), or under any Act relating to lunacy in Northern Ireland, founded on an allegation of any of the following matters namely—

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

(b) that a trustee or mortgagee or the personal representative of or other person deriving title under a trustee or mortgagee is out of the jurisdiction of the High 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 personal representative of or other person deriving title under a trustee or mortgagee, or the last surviving person interested 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 intestacy or has died and it is not known who is his personal 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 shall not prevent the court from directing a reconveyance or surrender or the payment of costs occasioned by any such order if improperly obtained.”