Part 10: Part 10: Liability of Trustees and Rights of Persons Dealing with a Trustee
Article 51 - Liability for breach of trust(1) Subject to these
Regulationsand to the Terms of the Trust, a Trusteeis liable for a breach of trust committed by the Trusteeor in respect of which the Trusteehas granted its approval.(2) A Trusteewho is liable for a breach of trust is liable for:(A) the loss or depreciation in value of the Trust Propertyresulting from such breach; and(B) the profit, if any, which would have accrued to the Trust Propertyif there had been no such breach.(3) Where there are two or more breaches of trust, a Trusteemust not set off a gain from one breach of trust against the loss resulting from another breach of trust.(4) A Trusteeis not liable for a breach of trust committed prior to its appointment, if such breach of trust was committed by some other Person.(5) A Trusteeis not liable for a breach of trust committed by a co-Trustee unless:(A) he becomes aware or ought to have become aware of the commission of such breach or of the intention of the co- Trusteeto commit a breach of trust; and(B) he actively conceals such breach or such intention or fails within a reasonable time to take proper steps to protect or restore the Trust Propertyor prevent such breach.(6) A Beneficiarymay:(A) relieve a Trusteeof liability to it for a breach of trust; or(B) indemnify a Trusteeagainst liability for a breach of trust.(7) Article 51(6) will not apply unless the Beneficiary:(A) has legal capacity;(B) has full knowledge of all material facts; and(C) is not improperly induced by the Trusteeto take action under Article 51(6).(8) Where two or more Trusteesare liable in respect of a breach of trust, they must be liable jointly and severally.(9) A Trusteewho becomes aware of a breach of trust under Article 51(4) must take all reasonable steps to have such breach remedied within a reasonable time of becoming aware of the breach of trust.(10) Nothing in the Terms of the Trustmust relieve, release, or exonerate a Trusteefrom liability for breach of trust arising from its own fraud, wilful misconduct or gross negligence. Amended (as from 24th December 2017).
Article 52 - Remedies for Breach of Trust
To remedy a breach of trust that has occurred or may occur, the
QFC Courtmay:(1) compel the Trusteeto perform the Trustee'sduties;(2) restrain the Trusteefrom committing a breach of trust;(3) compel the Trusteeto redress a breach of trust by paying money, restoring Property, or other means;(4) order a Trusteeto account;(5) appoint a special fiduciary to take possession of the Trust Propertyand administer the Trust;(6) suspend the Trustee;(7) remove the Trusteeas provided in Article 35;(8) reduce or deny remuneration to the Trustee;(9) subject to Article 60, invalidate an act of the Trustee, impose a lien or a constructive trust on the Trust Property, or trace Trust Propertywrongfully disposed of and recover the Propertyor its proceeds; or(10) order any other appropriate relief. Amended (as from 24th December 2017).
Article 53 - Damages in absence of a breach(1) Except as expressly provided in the
Terms of the Trust, a Trusteeis accountable to the Trustfor any profit made by the Trusteearising from the administration of the Trust, even where there has been a breach of trust.(2) Except as expressly provided in the Terms of the Trust, absent a breach of trust, a Trusteeis not liable for a loss or depreciation in the value of the Trust Propertyor for not having made a profit. Amended (as from 24th December 2017).
Article 54 - Legal fees and costs
In a judicial proceeding involving the administration of a
Trust, the QFC Court, as justice and equity may require, may award costs and expenses, including reasonable lawyers' fees, to any party, to be paid by another party or from the Trustthat is the subject of the proceeding. Amended (as from 24th December 2017).
Article 55 - Limitation of action against Trustee(1) Subject to Article 51(10) a
Personmay not commence a proceeding against a Trusteefor breach of trust more than three (3) years after the date such Personor a representative of such Personreceives a report from the Trusteethat adequately disclosed information that could form the basis for a potential claim for breach of trust and informed such Personor its representative that any proceeding based on such information must be commenced within the three (3) year period.(2) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that such Personor representative knows of the potential claim or should have inquired into its existence.(3) If Article 55(1) does not apply, a judicial proceeding by such Personagainst a Trusteefor breach of trust must be commenced within seven (7) years after the first to occur of:(A) the removal, resignation, or death of the Trustee;(B) in relation to a claim by a Beneficiary, the termination of the Beneficiary'sinterest in the Trust; or(C) the termination of the Trust.(4) No period of limitation will apply to an action brought against a Trustee:(A) in respect of any fraud to which the Trusteewas a party or to which the Trusteewas privy; or(B) to recover from the Trusteethe Trust Property:(i) in the Trustee'spossession;(ii) under the Trustee'scontrol; or(iii) previously received by the Trusteeand converted to the Trustee'suse.(5) This Article applies also to proceedings brought against an Enforcer. Amended (as from 24th December 2017).
Article 56 - Reliance on Trust instrument
Personwho acts in reasonable reliance on the Terms of the Trustas expressed in the TrustInstrument is not liable for a breach of trust to the extent the breach resulted from such reliance. Amended (as from 24th December 2017).
Article 57 - Exculpation of Trustee
A term of a
Trustrelieving a Trusteeof liability for breach of trust is unenforceable to the extent that it:(A) relieves the Trusteeof liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the Trustor the interests of the Beneficiaries; or(B) was inserted as the result of an abuse by the Trusteeof a fiduciary or confidential relationship with the Settlor. Amended (as from 24th December 2017).
Article 58 - Beneficiary's consent, release or ratification
Subject to Article 51(10), a
Trusteeis not liable to a Beneficiaryfor breach of trust if the Beneficiaryconsented to the conduct constituting the breach, released the Trusteefrom liability for the breach as provided in Article 51(6) or ratified the transaction constituting the breach, unless:(A) the consent, release, or ratification of the Beneficiarywas induced by improper conduct of the Trustee; or(B) at the time of the consent, release, or ratification, the Beneficiarydid not know of the Beneficiary'srights or of the material facts relating to the breach. Amended (as from 24th December 2017).
Article 59 - Limitation on Personal liability of Trustee(1) Except as otherwise provided in the contract, a
Trusteeis not personally liable on a contract properly entered into in the Trustee'sfiduciary capacity in the course of administering the Trustif the Trusteein the contract disclosed the fiduciary capacity.(2) A Trusteeis personally liable for torts committed in the course of administering a Trust, or for obligations arising from ownership or control of the Trust Propertyonly if the Trusteeis personally at fault.(3) A claim based on a contract entered into by a Trusteein the Trustee'sfiduciary capacity or an obligation arising from ownership or control of the Trust Property, or on a tort committed in the course of administering a Trust, may be asserted in a judicial proceeding against the Trusteein the Trustee'sfiduciary capacity, whether or not the Trusteeis personally liable for the claim. Amended (as from 24th December 2017).
Article 60 - Protection of Persons dealing with Trustees(1) A
Personother than a Beneficiarywho in good faith assists a Trustee, or who in good faith and for value deals with a Trustee, without knowledge that the Trusteeis exceeding or improperly exercising the Trustee'spowers is protected from liability as if the Trusteeproperly exercised the power.(2) A Personother than a Beneficiarywho in good faith deals with a Trusteeis not required to inquire into the extent of the Trustee'spowers or the propriety of their exercise.(3) A Personwho in good faith delivers assets to a Trusteeneed not ensure their proper application.(4) A Personother than a Beneficiarywho in good faith assists a former Trusteeor who in good faith and for value deals with a former Trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former Trusteewere still a Trustee.(5) Comparable protective provisions of other Regulationsor rules issued thereunder relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this Article. Amended (as from 24th December 2017).