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Court’s power to authorize dealings with trust property and variations of trust Under section 64 of the Trustee Act 1956, by Eugene Duhovnikoff BA/LLB

 The Court may:

(1) Subject to any contrary intention expressed in the instrument (if any) creating the trust, where in the opinion of the Court any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, retention, expenditure, or other transaction is expedient in the management or administration of any property vested in a trustee, or would be in the best interests of the persons beneficially interested under the trust, but it is inexpedient or difficult or impracticable to effect the same without the assistance of the Court, or the same cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law, the Court may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions (if any) as the Court may think fit, and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne, and as to the incidence thereof between capital and income: ‘Provided that, notwithstanding anything to the contrary in the instrument (if any) creating the trust, the Court, in proceedings in which all trustees and persons who are or may be interested are parties or are represented or consent to the order, may make such an order and may give such directions as it thinks fit to the trustee in respect of the exercise of any power conferred by the order. ’” …

(4) An application to the Court under this section may be made by the trustees, or by any of them, or by any person beneficially interested under the trust. ”

 

The Court can make an order empowering a trustee to enter into a transaction regardless of whether or not the trust deed already provides the trustee with that power.

In a case of any contrary intention being found in the trust deed the Court can still make an order. However it may only do so, only where all persons who may be interested in the proposed transaction are parties to the application, or where they are represented or consent to the order sought.

In case the absence of consent by an interested party the Court may therefore make an order if that party is either present or legally represented at the hearing. Whether or not the trust deed already contains the power sought by applicants, the Court must either be of the opinion that the proposed transaction is expedient in the management or administration of any property vested in the trustee, or that it is in the interests of all persons beneficially interested under the trust.

Where the instrument already provides the trustee with the power sought, the Court must also be satisfied that it will be “inexpedient or difficult or impracticable” for the trustee to effect the transaction without the assistance of the Court.

Section 64 is often utilized in a variety of transactions. For example in some cases the courts have made an order approving the sale of a property despite a specific prohibition in the trust deed or the refusal of consent by a person whose consent was required for the sale. There are also many other situations where section 64 can be used.

 

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You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.

 

Reeves/Duhovnikoff & Associates Ltd. 2017

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