Summary of recommendations
Chapter 12 – Other powers of the court
Section 66 − Power of court to give directions
R33 The new Trusts Act should provide:
(1) That any trustee may apply to the court for directions concerning any property subject to a trust, or respecting the management or administration of any such property, or respecting the exercise of any power or discretion vested in the trustee (replacing section 66 of the Trustee Act 1956).
(2) Whenever possible, a trustee should present to the court a proposed course of action or possible course of action regarding the matter on which the trustee seeks directions.
(3) Every application for directions should be served upon, and the hearing attended by, any person interested in the application or such interested persons as the court otherwise determines.
(4) For the avoidance of doubt:
(a) a court may refuse to provide directions if it would be more expedient for the issues to be addressed through a different form of proceedings;
(b) an application for directions under the section can only be made by a trustee for the time being of the trust in question; and
(c) the court’s power to give directions under (1) does not restrict the ability of the trustee to apply to the court for a declaration as to the interpretation of the trust instrument.
Section 72 – Payment of a commission to a trusteeTop
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.
Section 74 – Beneficiary indemnity for breach of trustTop
R35 The new Trusts Act should:
(1) Re-enact section 74 of the Trustee Act 1956, under which the court may, where a trustee has committed a breach of trust at the instigation or request or with the consent in writing of a beneficiary, make any order the court considers just indemnifying the trustee from the beneficiary’s interest in the trust property.
(2) Remove the antiquated reference to “married women restrained from anticipation”.
Section 75 – Barring claims and future claimsTop
R36 The new Trusts Act should:
(1) Include a provision (replacing section 75 of the Trustee Act 1956) under which a trustee may give notice to any claimant or potential claimant requiring the trustee to take proceedings within three months from the date of service; or to enforce the claim through the court.
(2) Provide that where a potential claimant on whom notice has been served fails to take proceedings, or fails to enforce the claim through the courts, the trustee may apply to the court for an order to have the claim barred.
(3) Provide that, as is currently provided in section 75, nothing in the new provision applies to any claim under the Family Protection Act 1955.
Sections 77 to 79 – Payments to the CrownTop
R37 The new Trusts Act should re-enact, with the following changes, the provisions in sections 77 to 79 of the Trustee Act 1956 under which trustees may pay unclaimed monies over to the Crown where they are unable to find beneficiaries and distribute the monies:
(1) The requirement for trustees to file an affidavit should be abolished and trustees should be required to give the Secretary to the Treasury information about the trust and beneficiaries (such as a copy of the trust deed and a statement of accounts).
(2) The Secretary to the Treasury should have a power to refuse to accept money where he or she is not given the required information about the trust and its beneficiaries.
(3) The obligation on the Secretary to the Treasury to publish a statement of all money held annually in the Gazette should be replaced by a more general requirement that he or she make that information publicly available in a manner that is likely to bring it to the attention of potential claimants. The obligation could in practice be fulfilled by putting the information into an online directory of unclaimed funds on a website.
(4) There should be no requirement on the Crown to pay any interest to claimants on any of the funds held under the provisions.
(5) The Crown should have a power to deduct any reasonable costs and expenses before making payment to any claimant.
Section 76 – Distribution of shares of missing beneficiariesTop
R38 The new Trusts Act should re-enact section 76 of the Trustee Act 1956 (under which the court has broad powers to approve distributions by trustees where beneficiaries cannot be traced). The following changes should be made to the advertising requirements in the provision:
(1) Trustees should be required to give notice advertising for potential beneficiaries in a manner that is likely to bring the notice to the attention of potential beneficiaries.
(2) Trustees may seek directions from the court where there is doubt as to what notice advertising for potential beneficiaries is appropriate.
Section 35 – Protection against creditors by means of advertisingTop
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.