Queensland Bills Queensland Bills[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
Queensland
TRUSTS (INVESTMENTS)
AMENDMENT BILL 1999
Queensland
TRUSTS (INVESTMENTS) AMENDMENT
BILL 1999
TABLE OF PROVISIONS
Section Page
PART 1--PRELIMINARY
1 Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PART 2--AMENDMENT OF TRUSTS ACT 1973
3 Act amended in pt 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4 Amendment of s 5 (Definitions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5 Replacement of pt 3 (Investments) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PART 3--INVESTMENTS
20 Application of particular provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 5
21 Power of trustee to invest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
22 Duties of trustee in relation to power of investment . . . . . . . . . . . . . 5
23 Law and equity preserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
24 Matters to which trustee must have regard in exercising
power of investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
25 Powers of trustee in relation to securities . . . . . . . . . . . . . . . . . . . . . 7
26 Investment in securities under RITS . . . . . . . . . . . . . . . . . . . . . . . . . 9
27 Power of trustee as to calls on shares . . . . . . . . . . . . . . . . . . . . . . . . 9
28 Power to purchase dwelling house as residence for beneficiary . . . 9
29 Power of trustee to retain investments . . . . . . . . . . . . . . . . . . . . . . . . 10
30 Loans and investments by trustees not breaches of trust in
particular circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
30A Limitation of liability of trustee for loss on improper
investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2
Trusts (Investments) Amendment
30B Court may take into account investment strategy etc. in
action for breach of trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
30C Power of court to set off gains and losses arising from
investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6 Insertion of new pt 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PART 10--TRANSITIONAL PROVISION
115 Transitional provision for Trusts (Investments)
Amendment Act 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART 3--CONSEQUENTIAL AMENDMENTS
7 Amended legislation--schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . 14
CONSEQUENTIAL AMENDMENTS
COURT FUNDS ACT 1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
FUNERAL BENEFIT BUSINESS ACT 1982 . . . . . . . . . . . . . . . . . . . . . . . . 14
QUEENSLAND INVESTMENT CORPORATION ACT 1991 . . . . . . . . . . . 15
QUEENSLAND TREASURY CORPORATION ACT 1988 . . . . . . . . . . . . . 15
STATE DEVELOPMENT AND PUBLIC WORKS
ORGANISATION ACT 1971 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
STATE HOUSING ACT 1945 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
STATUTORY BODIES FINANCIAL ARRANGEMENTS ACT 1982 . . . . 16
TRUSTEE COMPANIES ACT 1968 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
TRUSTS ACT 1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
VALUATION OF LAND ACT 1944 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1999
A BILL
FOR
An Act to amend the Trusts Act 1973 in relation to investment of trust
funds, and for other purposes
s1 4 s4
Trusts (Investments) Amendment
The Parliament of Queensland enacts-- 1
ART 1--PRELIMINARY 2
P
title 3
Short
Clause 1. This Act may be cited as the Trusts (Investments) Amendment Act 4
1999. 5
6
Commencement
Clause 2. This Act commences on a day to be fixed by proclamation. 7
PART 2--AMENDMENT OF TRUSTS ACT 1973 8
amended in pt 2 9
Act
Clause 3. This part amends the Trusts Act 1973. 10
of s 5 (Definitions) 11
Amendment
Clause 4. Section 5, definition "authorised investments"-- 12
omit, insert-- 13
` "authorised investments" means investments of trust funds that are-- 14
(a) authorised by the instrument creating the trust; or 15
(b) made by the trustee exercising a power of investment under part 3 16
or under an order under section 94;1 or 17
(c) authorised by another Act or the general law.'. 18
1 Part 3 (Investments), section 94 (Court's jurisdiction to make other orders)
s5 5 s5
Trusts (Investments) Amendment
of pt 3 (Investments) 1
Replacement
Clause 5. Part 3-- 2
omit, insert-- 3
`PART 3--INVESTMENTS 4
of particular provisions 5
`Application
`20. Sections 29 to 30C apply despite anything contained in the 6
instrument creating the trust. 7
of trustee to invest 8
`Power
`21. A trustee may, unless expressly forbidden by the instrument creating 9
the trust-- 10
(a) invest trust funds in any form of investment; and 11
(b) at any time, vary an investment or realise an investment of trust 12
funds and reinvest an amount resulting from the realisation in any 13
form of investment. 14
of trustee in relation to power of investment 15
`Duties
`22.(1) A trustee must, in exercising a power of investment-- 16
(a) if the trustee's profession, business or employment is, or 17
includes, acting as a trustee or investing money for other 18
persons--exercise the care, diligence and skill a prudent person 19
engaged in that profession, business or employment would 20
exercise in managing the affairs of other persons; or 21
(b) if the trustee's profession, business or employment is not, or does 22
not include, acting as a trustee or investing money for other 23
persons--exercise the care, diligence and skill a prudent person of 24
business would exercise in managing the affairs of other persons. 25
`(2) A trustee must, in exercising a power of investment, comply with a 26
provision of the instrument creating the trust that is binding on the trustee 27
and requires the obtaining of a consent or approval or compliance with a 28
direction for trust investments. 29
s5 6 s5
Trusts (Investments) Amendment
`(3) A trustee must, at least once in each year, review the performance, 1
individually and as a whole, of trust investments. 2
and equity preserved 3
`Law
`23.(1) A rule or principle of law or equity imposing a duty on a trustee 4
exercising a power of investment continues to apply except so far as it is 5
inconsistent with this or another Act or the instrument creating the trust. 6
`(2) Without limiting the rules or principles mentioned in subsection (1), 7
they include a rule or principle imposing-- 8
(a) a duty to exercise the powers of a trustee in the best interests of all 9
present and future beneficiaries of the trust; and 10
(b) a duty to invest trust funds in investments that are not speculative 11
or hazardous; and 12
(c) a duty to act impartially towards beneficiaries and between 13
different classes of beneficiaries; and 14
(d) a duty to obtain advice. 15
`(3) A rule or principle of law or equity relating to a provision in an 16
instrument creating a trust that purports to exempt, limit the liability of, or 17
indemnify a trustee in relation to a breach of trust, continues to apply. 18
`(4) If a trustee is under a duty to obtain advice, the reasonable cost of 19
obtaining the advice is payable out of trust funds. 20
to which trustee must have regard in exercising power of 21
`Matters
investment 22
`24.(1) Without limiting the matters a trustee may take into account when 23
exercising a power of investment, a trustee must, so far as they are 24
appropriate to the circumstances of the trust, have regard to the following 25
matters-- 26
(a) the purposes of the trust and the needs and circumstances of the 27
beneficiaries; 28
(b) the desirability of diversifying trust investments; 29
s5 7 s5
Trusts (Investments) Amendment
(c) the nature of and risk associated with existing trust investments 1
and other trust property; 2
(d) the need to maintain the real value of the capital or income of the 3
trust; 4
(e) the risk of capital or income loss or depreciation; 5
(f) the potential for capital appreciation; 6
(g) the likely income return and the timing of income return; 7
(h) the length of the term of the proposed investment; 8
(i) the probable duration of the trust; 9
(j) the liquidity and marketability of the proposed investment during, 10
and at the end of, the term of the proposed investment; 11
(k) the total value of the trust estate; 12
(l) the effect of the proposed investment for the tax liability of the 13
trust; 14
(m) the likelihood of inflation affecting the value of the proposed 15
investment or other trust property; 16
(n) the cost (including commissions, fees, charges and duties 17
payable) of making the proposed investment; 18
(o) the results of a review of existing trust investments. 19
`(2) A trustee-- 20
(a) may obtain, and if obtained must consider, independent and 21
impartial advice reasonably required for the investment of trust 22
funds or the management of the investment from a person whom 23
the trustee reasonably believes to be competent to give the advice; 24
and 25
(b) may pay out of trust funds the reasonable costs of obtaining the 26
advice. 27
of trustee in relation to securities 28
`Powers
`25.(1) If securities of a corporation are subject to a trust, the trustee may 29
agree to a scheme or arrangement-- 30
s5 8 s5
Trusts (Investments) Amendment
(a) for or arising out of the reconstruction, reduction of capital or 1
liquidation of, or the issue of shares by, the corporation; or 2
(b) for the sale of all or part of the property and undertaking of the 3
corporation to another corporation; or 4
(c) for the acquisition of securities of the corporation, or of control of 5
the corporation, by another corporation; or 6
(d) for the amalgamation of the corporation with another corporation; 7
or 8
(e) for the release, modification or variation of rights, privileges or 9
liabilities attached to the securities, or any of them; 10
in the same way as if the trustee were beneficially entitled to the securities. 11
`(2) The trustee may accept instead of, or in exchange for, the securities 12
subject to the trust, securities of any denomination or description of another 13
corporation that is party to the scheme or arrangement. 14
`(3) If a conditional or preferential right to subscribe for securities in a 15
corporation is offered to a trustee for a holding in that corporation or another 16
corporation, the trustee may, for all or any of the securities-- 17
(a) exercise the right and apply capital money subject to the trust in 18
payment of the consideration; or 19
(b) assign to any person, including a beneficiary under the trust, the 20
benefit of the right, or the title to the right, for the best 21
consideration that can be reasonably obtained; or 22
(c) renounce the right. 23
`(4) A trustee accepting or subscribing for securities under this section is, 24
for any provision of this part, exercising a power of investment. 25
`(5) A trustee may retain securities accepted or subscribed for under this 26
section for any period for which the trustee could properly have retained the 27
original securities. 28
`(6) The consideration for an assignment made under subsection (3)(b) 29
must be held as capital of the trust. 30
`(7) This section applies to securities whether acquired before or after the 31
commencement of this section. 32
s5 9 s5
Trusts (Investments) Amendment
in securities under RITS 1
`Investment
`26.(1) A chose in action arising under RITS that entitles its holder to a 2
security of a particular description (the "underlying security") is, for this 3
Act and the instrument creating a trust, taken to be the same in all respects 4
as the underlying security. 5
`(2) The holding or acquisition by a trustee of a chose in action 6
mentioned in subsection (1) is taken to be an investment by the trustee in the 7
underlying security. 8
`(3) It does not matter that the right conferred by the chose in action is a 9
right in relation to securities of a particular description and not in relation to 10
particular securities. 11
`(4) In this section-- 12
"RITS" means the Reserve Bank of Australia's Information and Transfer 13
System, as operating from time to time. 14
of trustee as to calls on shares 15
`Power
`27. A trustee may-- 16
(a) apply capital money subject to a trust in payment of calls on 17
shares subject to the same trust; and 18
(b) if the trustee is a trustee corporation, exercise the power conferred 19
by paragraph (a) despite the shares on which the calls are made 20
being shares in the trustee corporation. 21
to purchase dwelling house as residence for beneficiary 22
`Power
`28.(1) A trustee may-- 23
(a) purchase a dwelling house for a beneficiary to use as a residence; 24
or 25
(b) enter into an agreement or arrangement to secure for a beneficiary 26
a right to use a dwelling house as a residence. 27
s5 10 s5
Trusts (Investments) Amendment
`(2) Despite the terms of the instrument creating the trust, a trustee may, 1
if to do so would not unfairly prejudice the interests of other beneficiaries, 2
retain as part of the trust property a dwelling house for a beneficiary to use 3
as a residence. 4
`(3) A dwelling house purchased, retained or otherwise secured for use 5
by the beneficiary as a residence may be made available to the beneficiary 6
for that purpose on the conditions consistent with the trust and the extent of 7
the beneficiary's interest that the trustee considers appropriate. 8
`(4) The trustee may retain a dwelling house or an interest or rights in a 9
dwelling house acquired under this section after the use of the dwelling 10
house by the beneficiary has ended. 11
`(5) In this section-- 12
"dwelling house" includes-- 13
(a) a building or part of a building designed, or converted or capable 14
of being converted, for use as a residence; and 15
(b) amenities or facilities for use in association with the use of a 16
dwelling house. 17
of trustee to retain investments 18
`Power
`29. A trustee is not liable for breach of trust only because the trustee 19
continues to hold an investment that has stopped being an investment-- 20
(a) authorised by the instrument creating the trust; or 21
(b) properly made by the trustee exercising a power of investment; or 22
(c) made under this part as previously in force from time to time; or 23
(d) authorised by another Act or the general law. 24
and investments by trustees not breaches of trust in particular 25
`Loans
circumstances 26
`30.(1) If a trustee lends an amount on the security of property, the 27
trustee is not in breach of trust only on the ground of the comparison of the 28
amount of the loan with the value of the property at the time when the loan 29
was made-- 30
s5 11 s5
Trusts (Investments) Amendment
(a) if it appears to the court that-- 1
(i) in making the loan, the trustee was acting on a report about 2
the value of the property made by a person whom the trustee 3
reasonably believed to be competent to give the report and 4
whom the trustee instructed and employed independently of 5
any owner of the property; and 6
(ii) the amount of the loan was not more than two-thirds of the 7
value of the property as stated in the report; and 8
(iii) the loan was made in reliance on the report; or 9
(b) if the trustee is insured by an entity prescribed under a regulation 10
carrying on the business of insurance against all loss that may 11
arise because of the default of the borrower. 12
`(2) If a trustee lends an amount on the security of leasehold property, the 13
trustee is not in breach of trust only because the trustee dispensed, either 14
completely or in part, with the production or investigation of the lessee's 15
title when making the loan. 16
`(3) This section applies to transfers of existing securities as well as to 17
new securities and to investments whether made before or after the 18
commencement of this section. 19
of liability of trustee for loss on improper investments 20
`Limitation
`30A.(1) If a trustee improperly lends trust money on a security that 21
would have been a proper investment if the amount lent had been less than 22
the actual amount lent-- 23
(a) the security is to be taken to be a proper investment in relation to 24
the lesser amount; and 25
(b) the trustee is only liable to make good the difference between the 26
amount advanced and the smaller amount, with interest. 27
`(2) This section applies to investments whether made before or after the 28
commencement of this section. 29
s6 12 s6
Trusts (Investments) Amendment
may take into account investment strategy etc. in action for 1
`Court
breach of trust 2
`30B. In a proceeding against a trustee for a breach of trust in relation to a 3
duty under this part relating to the trustee's power of investment, the court 4
may, when considering the question of the trustee's liability, take into 5
account the following matters-- 6
(a) the nature and purpose of the trust; 7
(b) whether the trustee had regard to the matters set out in section 242 8
so far as they are appropriate to the circumstances of the trust; 9
(c) whether the trust investments have been made under an 10
investment strategy formulated in accordance with the duty of a 11
trustee under this part; 12
(d) the extent the trustee acted on the independent and impartial advice 13
of a person competent, or apparently competent, to give the 14
advice. 15
of court to set off gains and losses arising from investment 16
`Power
`30C.(1) The court may, when considering an action for breach of trust 17
arising out of or in relation to an investment by a trustee where a loss has 18
been or is expected to be sustained by the trust, set off all or part of the loss 19
resulting from the investment against all or part of the gain resulting from 20
any other investment whether in breach of trust or not. 21
`(2) The power of set off conferred by subsection (1) is in addition to any 22
other power or entitlement to set off all or part of any loss against any 23
property.'. 24
of new pt 10 25
Insertion
Clause 6. After part 9-- 26
insert-- 27
2 Section 24 (Matters to which trustee must have regard in exercising power of
investment)
s7 13 s7
Trusts (Investments) Amendment
`PART 10--TRANSITIONAL PROVISION 1
provision for Trusts (Investments) Amendment 2
`Transitional
Act 1999 3
`115.(1) A provision in an Act or document, whether or not the 4
document creates a trust, that empowers or requires a person to invest an 5
amount in the investments authorised by this Act as in force immediately 6
before the commencement of this section, is to be read as if it empowered 7
or required the person to invest the amount according to the provisions of 8
this part as to the investment of trust funds. 9
`(2) In an Act or document, and if otherwise appropriate, the following 10
references are taken to be references to an authorised investment under this 11
Act as in force after the commencement of this section-- 12
(a) a reference to an authorised investment under the repealed Acts, 13
section 4; 14
(b) a reference to an authorised investment under this Act as in force 15
immediately before the commencement of this section.'. 16
ART 3--CONSEQUENTIAL AMENDMENTS 17
P
legislation--schedule 18
Amended
Clause 7. The schedule amends the legislation mentioned in it. 19
20
14
Trusts (Investments) Amendment
SCHEDULE 1
¡
ONSEQUENTIAL AMENDMENTS 2
C
section 7 3
OURT FUNDS ACT 1973 4
´C
1. Section 11(2), from `in any investment'-- 5
omit, insert-- 6
`other than under the Trusts Act 1973, part 3.'. 7
FUNERAL BENEFIT BUSINESS ACT 1982 8
´
1. Section 31(2), from `pursuant'-- 9
omit, insert-- 10
`under the Trusts Act 1973, part 3.'. 11
2. Section 40(1)(a) and (b)-- 12
omit, insert-- 13
`(a) under the Trusts Act 1973, part 3; or 14
(b) in an investment approved by the Governor in Council; or'. 15
3. Section 65(1), definition "the account", from ` , or a building'-- 16
omit. 17
15
Trusts (Investments) Amendment
SCHEDULE (continued)
UEENSLAND INVESTMENT CORPORATION ACT 1
´Q
1991 2
1. Section 41-- 3
omit. 4
UEENSLAND TREASURY CORPORATION ACT 5
´Q
1988 6
1. Section 28-- 7
omit. 8
TATE DEVELOPMENT AND PUBLIC WORKS 9
´S
ORGANISATION ACT 1971 10
1. Section 99(1)-- 11
omit. 12
2. Section 99(2) and (3)-- 13
renumber as section 99(1) and (2). 14
STATE HOUSING ACT 1945 15
´
1. Heading before s 17(4A)-- 16
omit. 17
16
Trusts (Investments) Amendment
SCHEDULE (continued)
2. Section 17(4A)-- 1
omit. 2
TATUTORY BODIES FINANCIAL 3
´S
ARRANGEMENTS ACT 1982 4
1. Section 46-- 5
omit, insert-- 6
`Category 3 investment power 7
`46.(1) Category 3 investment power includes category 2 investment 8
power and the power to invest in all or any of the following, regardless of 9
the period of the investment-- 10
(a) the first legal or first statutory mortgage of an estate in fee simple 11
in land in any State; 12
(b) the purchase of-- 13
(i) land in fee simple in any State; or 14
(ii) leasehold land in the State held under a lease that is for a 15
term of 40 years or more and that is unexpired at the time of 16
the purchase; or 17
(iii) subject to the Land Act 1994, a freeholding lease of land held 18
from the State under that Act; 19
(c) debentures or other securities charged on the funds or property of 20
a local government; 21
(d) an investment arrangement prescribed under a regulation for this 22
paragraph. 23
`(2) In this section-- 24
"freeholding lease" means-- 25
17
Trusts (Investments) Amendment
SCHEDULE (continued)
(a) a pre-Wolfe freeholding lease, or post-Wolfe freeholding lease, 1
that was an agricultural farm under the repealed Land Act 1962; or 2
(b) a grazing homestead freeholding lease. 3
"grazing homestead freeholding lease" see Land Act 1994, schedule 6. 4
"post-Wolfe freeholding lease" see Land Act 1994, schedule 6. 5
"pre-Wolfe freeholding lease" see Land Act 1994, schedule 6.'. 6
2. Section 65-- 7
omit. 8
TRUSTEE COMPANIES ACT 1968 9
´
1. Section 36A(1), from `is restricted'-- 10
omit, insert-- 11
`is in accordance with the Trusts Act 1973, part 3.'. 12
2. Section 36A(2) and (3)-- 13
omit. 14
TRUSTS ACT 1973 15
´
1. Section 33(1)(i)(iii) and (iv)-- 16
omit. 17
18
Trusts (Investments) Amendment
SCHEDULE (continued)
2. Section 37(6), `21 or 27'-- 1
omit, insert-- 2
`30'. 3
3. Section 49, from `Subject' to `a trustee'-- 4
omit, insert-- 5
`A trustee'. 6
ALUATION OF LAND ACT 1944 7
´V
1. Section 78, `27(1)'-- 8
omit, insert-- 9
`30(1)'. 10
© State of Queensland 1999
[Index] [Search] [Download] [Related Items] [Help]