Appointment,

removal, retirement
and control
S U B T ITLE
Appointment
The rule is that any person capable of holding property in law could be made a trustee.

Phua Chiu Har v Amanah Raya Bhd [2002] 4 AMR 4753

‘the court is under no duty or obligation to determine the reasons for the deceased’s
appointment of the defendant as the trustee of her estate’.

• A person may declare himself or herself as a trustee.

• A trust instrument may specify someone to appoint the trustees.

• A person could also be a trustee by implication of law or by operation of law.

• Where the trust instrument or the will makes no provision for the appointment of trustees,
the court will make the necessary appointment.

Exception stated in the case of Re Lysaght [1965] 2 AII ER 888

Appointment
Number of trustees:
Section 39 (1) (a) , (b) of the Trustees Act 1949
Exception under Section 39(2) of the Trustees Act 1949

Subsequent appointments of trustees may be made in a number of ways.

Expression Provision - Section 40(1) (a) (b) (c) (d) (e) (f) of the Trustees Act 1949
By Court – Section 45 (1) (a) (b) of the Trustees Act 1949
Re Tempest (1866) 1 Ch App 485
Retirement
• The trust instrument may make specific provisions in respect of the
retirement of trustees.
• Section 40(1) of the Trustees Act 1949
Section 43(1) of the Trustees Act 1949
• With the consent of all the beneficiaries
• By court order – Section 45 of the Trustees Act 1949
Removal
• The trust instrument may contain express provisions authorising the removal of
trustees.
• Section 40(1) of the Trustees Act 1949
Ligar Fernandez v Eric Claude Cooke [2002] 6 CLJ 152
• Section 45 of the Trustees Act 1949
Titterton v Oates [1998] 143 FLR
• Courts inherent power to remove trustees
Re Wrightson [1908] 1 Ch 789
Letterstedt v Broers (1884) 9 App Cas 371
Death of trustee
Where there are 2 or more trustees, and death occurs to one of them,
then the remaining living trustee may fulfill his obligations until
another trustee is appointed or the trustee can act solely to fulfill the
mission of the trust.
Section 23 (1) of the Trustees Act 1949
In the case of sole trustee, if he dies, then the personal representatives
can exercise the power given to the sole trustee – Section 23(2) or
choose to appoint new trustees as they are not bound to accept
trusteeship as per Section 40(1) of the Trustees Act 1949.
Disclaimer of trusteeship
Any person nominated to be a trustee can choose to disclaim it.
But once accepted, then cannot disclaim.
Re Lister [1926] Ch 149
Vesting of trust property
The vesting of trust property in new or continuing trustees is provided
for under Section 44 of the Trustees Act 1949
Section 44(3) of the Trustees Act 1949
Section 48 of the Trustees Act 1949
Fiduciary nature of trusteeship
A trustee cannot expect remuneration for performing duties in relation to the trust.

Barret v Hartley (1866) LR 2 Eq 789

• Recover costs and expenses in executing the trust – Section 35(2) of the Trustees Act 1949

• Remuneration is provided for in the trust instrument

Re Chapple (1884) LR 27 Ch D 584

• Remuneration authorised by the court

Boardman v Phipps

Brown v Litton (1711) 1 P Wms 140

Fiduciary nature of trusteeship
Remuneration
• With consent of with all the beneficiaries
• Authorised by legislation – Section 46 of the Trustees Act 1949
• Rule in Cradock v Piper (1850) 1 Mac & G 664
• Overseas trust assets – Re Northcote’s Will Trust [1949] 1 All ER 442
• Secret profits – If trustee makes secret profit from a trust, equity will not allow him
to retain the same and shall hold the benefit under the constructive trust.
Lac Minerals Ltd v International Corona Resources Ltd (1989) 61 DLR (4th) 14
Keech v Sandford (1726) Sel Cas Ch 61
Fiduciary nature of trusteeship
Purchase of trust property
The general position is that a trustee cannot involved in self-dealing
with property belonging to the trust.
Campbell v Walker (1800) 5 Ves 67, 68
Tito v Waddell (No 2) [1977] Ch 106
Holder v Holder [1968] Ch 353
Purchase beneficial interest – Coles v Trecothick (1804) 9 Ves 234
Fiduciary nature of trusteeship
Director’s fees
Where trustees are appointed as directors of companies on account of
trusts and shareholdings in the related companies, trustee is not to
profit from the trusteeship.
Re Macadam [1946] Ch 73
But the rule does not apply if a trustee secures directorship not by
virtue of his position as a trustee.
Re Llewellin’s Will Trusts [1949] Ch 225
Fiduciary nature of trusteeship
Competing with the trust
A trustee is prohibited from competing with any business belonging to
the trust.
Re Thomson [1930] 1 Ch 203
Receiving bribes
Constructive trust may be imposed on a trustee who has received
bribes.
AG of Hong Kong v Reid [1994] 1 All ER 1
Tutorial questions
1. Quick Build Ltd is a property development company. They employ Good Cost Ltd
as their surveyors. Alex is one of the Good Cost surveyors. He goes to value a
development plot for Quick Build Ltd. Alex then tells his friend John about the
plot. Alex and John goes ahead and successfully outbids Quick Build for the plot.
Discuss
2. Annie, Ben and Cindy are the trustees of a private trust set up under the will of a
testator who died last year. The beneficiaries are members of the testator’s
family. The assets of the trust comprise of the shares in the testator’s family
business, FreshGreens Ltd which deals with vegetables gardening. Annie is a
solicitor, Ben is accountant and Cindy was a friend of the testator and has
considerable experience in vegetable gardening.
The trust instrument contains no provision for remuneration of the trustees.
Advise the trustees whether they are entitled to claim remuneration for acting as
trustees.