Chapter 12
Other powers of the court

Section 35 – Protection against creditors by means of advertising


R39 The new Trusts Act should re-enact section 35 of the Trustee Act 1956, which protects trustees from liability where they advertise and give notice to potential creditors before distributing property under a trust. The following changes should be made to the advertising requirements in the provision:
(1) Trustees should be required to give notice advertising for claims in a manner that is likely to bring the notice to the attention of potential claimants.
(2) Trustees may seek directions from the court where there is doubt as to what notice advertising for claims is appropriate.

12.42Where there is doubt as to what advertisements should be published by a trustee giving notice advertising for claims before distributing property under a trust, the court has a power to give directions under section 35(4). Where the trustees obtain and comply with such directions they are protected against personal liability.

12.43The options for modernising the approach to advertising and giving notice that we have just discussed in relation to section 76 also apply in relation to section 35. We recommend that the approach recommended for modernising the advertising requirements in section 76 should also be taken here. Again, for the reasons already discussed we have not proceeded with the proposal in the Preferred Approach Paper that would have conferred an advisory role on the Public Trust in relation to advertising for claims here either.