Contents

Chapter 12
Other powers of the court

Section 72 – Payment of a commission to a trustee

RECOMMENDATION

R34 The new Trusts Act should re-enact section 72 of the Trustee Act 1956 (under which the court may authorise payment of a reasonable fee or remuneration to a trustee out of trust property) subject to the following modifications:
(1) The new provision (replacing section 72) should provide that when determining what payment would be just and reasonable the court must consider:
(a) the total amount that has already been paid to any trustee of the trust, whether pursuant to the terms of the trust or to any earlier order of the court or to any agreement or otherwise;  
(b) the amount and difficulty of the services rendered by the trustee;  
(c) the liabilities to which the trustee is or has been exposed, and the responsibilities imposed on the trustee;  
(d) the skill and success of the trustee in administering the trust;  
(e) the value of the trust property;  
(f) the time and services reasonably required of the trustee;  
(g) whether any payment that might otherwise have been allowed should be refused or reduced due to the conduct of the trustee in the administration of the trust; and  
(h) all other circumstances that the court considers relevant.
(2) The court should only authorise payment under the provision where the trustee has provided services above and beyond what would normally be expected from a trustee.
12.9Currently under section 72 the court may authorise payment out of trust property of a “commission or percentage” to a trustee of an amount for the trustee’s services before, during, or on termination of the administration of the trust. The current section also lists a number of important factors that the court must have regard to when determining whether payment of commission would be just and reasonable.275

12.10It is clear that the courts will continue to need this power to approve the payment of remuneration to trustees where that is just and reasonable. We recommend that section 72 be modernised and retained. The replacement provision in new trusts legislation should use contemporary terminology such as “a fee” or “remuneration” rather than “commission” and “percentage”.

12.11The few submitters who commented on section 72 all favoured including in the new provision a non-exhaustive list of factors that should be taken into account by the court when determining whether to authorise payment to a trustee and the level of such remuneration. Some minor modifications to the current list were considered desirable. Our recommendation reflects these points.

12.12Finally, it should be acknowledged that payment of remuneration on the authority of the court under this section is one of the few exceptions to a trustee’s duty to act without reward and not to profit from trusteeship. We recommend that the replacement provision be drafted in a manner that makes it clear that payment is an exception to the trustee’s default duty to act without reward and that the courts will authorise payment under the provision only where the trustee has provided services above and beyond what would normally be expected from a trustee.

275Trustee Act 1956, s 72(1A).