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  • 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 Regulations and to the Terms of the Trust, a Trustee is liable for a breach of trust committed by the Trustee or in respect of which the Trustee has granted its approval.
      (2) A Trustee who is liable for a breach of trust is liable for:
      (A) the loss or depreciation in value of the Trust Property resulting from such breach; and
      (B) the profit, if any, which would have accrued to the Trust Property if there had been no such breach.
      (3) Where there are two or more breaches of trust, a Trustee must not set off a gain from one breach of trust against the loss resulting from another breach of trust.
      (4) A Trustee is 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 Trustee is 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-Trustee to 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 Property or prevent such breach.
      (6) A Beneficiary may:
      (A) relieve a Trustee of liability to it for a breach of trust; or
      (B) indemnify a Trustee against 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 Trustee to take action under Article 51(6).
      (8) Where two or more Trustees are liable in respect of a breach of trust, they must be liable jointly and severally.
      (9) A Trustee who 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 Trust must relieve, release, or exonerate a Trustee from 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 Court may:

      (1) compel the Trustee to perform the Trustee's duties;
      (2) restrain the Trustee from committing a breach of trust;
      (3) compel the Trustee to redress a breach of trust by paying money, restoring Property, or other means;
      (4) order a Trustee to account;
      (5) appoint a special fiduciary to take possession of the Trust Property and administer the Trust;
      (6) suspend the Trustee;
      (7) remove the Trustee as 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 Property wrongfully disposed of and recover the Property or 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 Trustee is accountable to the Trust for any profit made by the Trustee arising 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 Trustee is not liable for a loss or depreciation in the value of the Trust Property or 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 Trust that 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 Person may not commence a proceeding against a Trustee for breach of trust more than three (3) years after the date such Person or a representative of such Person receives a report from the Trustee that adequately disclosed information that could form the basis for a potential claim for breach of trust and informed such Person or 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 Person or 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 Person against a Trustee for 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's interest 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 Trustee was a party or to which the Trustee was privy; or
      (B) to recover from the Trustee the Trust Property:
      (i) in the Trustee's possession;
      (ii) under the Trustee's control; or
      (iii) previously received by the Trustee and converted to the Trustee's use.
      (5) This Article applies also to proceedings brought against an Enforcer.
      Amended (as from 24th December 2017).

    • Article 56 - Reliance on Trust instrument

      Any Person who acts in reasonable reliance on the Terms of the Trust as expressed in the Trust Instrument 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 Trust relieving a Trustee of liability for breach of trust is unenforceable to the extent that it:

      (A) relieves the Trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the Trust or the interests of the Beneficiaries; or
      (B) was inserted as the result of an abuse by the Trustee of 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 Trustee is not liable to a Beneficiary for breach of trust if the Beneficiary consented to the conduct constituting the breach, released the Trustee from 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 Beneficiary was induced by improper conduct of the Trustee; or
      (B) at the time of the consent, release, or ratification, the Beneficiary did not know of the Beneficiary's rights 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 Trustee is not personally liable on a contract properly entered into in the Trustee's fiduciary capacity in the course of administering the Trust if the Trustee in the contract disclosed the fiduciary capacity.
      (2) A Trustee is personally liable for torts committed in the course of administering a Trust, or for obligations arising from ownership or control of the Trust Property only if the Trustee is personally at fault.
      (3) A claim based on a contract entered into by a Trustee in the Trustee's fiduciary 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 Trustee in the Trustee'sfiduciary capacity, whether or not the Trustee is personally liable for the claim.
      Amended (as from 24th December 2017).

    • Article 60 - Protection of Persons dealing with Trustees

      (1) A Person other than a Beneficiary who in good faith assists a Trustee, or who in good faith and for value deals with a Trustee, without knowledge that the Trustee is exceeding or improperly exercising the Trustee's powers is protected from liability as if the Trustee properly exercised the power.
      (2) A Person other than a Beneficiary who in good faith deals with a Trustee is not required to inquire into the extent of the Trustee's powers or the propriety of their exercise.
      (3) A Person who in good faith delivers assets to a Trustee need not ensure their proper application.
      (4) A Person other than a Beneficiary who in good faith assists a former Trustee or 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 Trustee were still a Trustee.
      (5) Comparable protective provisions of other Regulations or 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).