TRUSTEES ACT.
ARRANGEMENT OF SECTIONS.
Section
PART I
PRELIMINARY.
PART II
INVESTMENTS.
5. Power to retain investment.
6. Enlargement of powers of investment.
7. Investment in bearer securities.
8. Loans and investments by trustees not chargeable as breaches of trust.
9. Liability for loss by reason of improper investment.
10. Powers supplementary to powers of investment.
11. Power to deposit money at bank and to pay calls.
PART III
GENERAL POWERS OF TRUSTEES AND PERSONAL REPRESENTATIVES.
General powers.
12. Power of trustees for sale to sell by auction, etc.
13. Power to sell subject to depreciatory conditions.
14. Power of trustees to give receipts.
15. Power to compound liabilities.
16. Power to raise money by sale, mortgage, etc.
17. Protection to purchasers and mortgagees dealing with trustees.
18. Devolution of powers or trusts.
20. Application of insurance money where policy kept up under any trust, power or obligation.
21. Deposit of documents for safe custody.
22. Reversionary interests, valuations and audit.
24. Power to concur with others.
25. Power to delegate trusts during absence abroad.
Indemnities.
26. Protection against liability in respect of rents and covenants.
27. Protection by means of advertisements.
28. Protection in regard to notice.
29. Exoneration of trustees in respect of certain powers of attorney.
30. Implied indemnity of trustees.
Maintenance, advancement and protective trusts.
31. Power to apply income for maintenance and to accumulate surplus income during a minority.
PART IV
APPOINTMENT AND DISCHARGE OF TRUSTEES.
34. Limitation of the number of trustees.
35. Power of appointing new or additional trustees.
36. Supplemental provisions as to appointment of trustees.
37. Evidence as to a vacancy in a trust.
38. Retirement of trustee without a new appointment.
39. Vesting of trust property in new or continuing trustees.
PART V
POWERS OF THE COURT.
Appointment of new trustees.
40. Power of court to appoint new trustees.
41. Power to authorise remuneration.
42. Powers of new trustee appointed by the court.
Vesting orders.
44. Orders as to contingent rights of unborn persons.
45. Vesting order in place of transfer by infant mortgagee.
46. Vesting order consequential on order for sale or mortgage of land.
47. Vesting order consequential on judgment for specific performance, etc.
49. Power to appoint person to convey.
50. Vesting orders as to stock and things in action.
51. Vesting orders of charity property.
52. Vesting orders in relation to infant's beneficial interests.
53. Orders made upon certain allegations to be conclusive evidence.
Jurisdiction to make other orders.
54. Power of court to authorise dealings with trust property.
55. Persons entitled to apply for orders.
56. Power to give judgment in absence of a trustee.
57. Power to charge costs on trust estate.
58. Power to relieve trustee from personal liability.
59. Power to make beneficiary indemnify for breach of trust.
Payment into court.
60. Payment into court by trustees.
61. Indemnity for acts done in pursuance of Act.
PART VI
GENERAL PROVISIONS.
63. Act binding on Government.
CHAPTER 164
TRUSTEES ACT.
Commencement: 8 April, 1954.
An Act relating to trustees.
PART I
PRELIMINARY.
In this Act, unless the context otherwise requires—
(a) "authorised investments" means investments authorised by the instrument, if any, creating the trust for the investment of money subject to the trust, or by law;
(b) "contingent right" as applied to land includes a contingent or executory interest, a possibility coupled with an interest, whether the object of the gift or limitation of the interest or possibility is or is not ascertained, also a right of entry, whether immediate or future, and whether vested or contingent;
(c) "court" means the High Court or a judge of the High Court;
(d) "instrument" includes Act of Parliament;
(e) "land" includes land of any tenure, and mines and minerals, whether or not severed from the surface, buildings or parts of buildings, whether the division is horizontal, vertical or made in any other way, and other corporeal hereditaments; also a rent and other incorporeal hereditaments and an easement, right, privilege, or benefit in, over or derived from land; and in this definition "mines" and "minerals" include any strata or seam of minerals or substances in or under any land, and powers of working and getting the same, but not an undivided share thereof; and "hereditaments" means immovable property which under an intestacy would devolve on an heir;
(f) "mortgage" means an instrument of mortgage capable of being registered under the Registration of Titles Act;
(g) "mortgagee" includes every person deriving title under the original mortgagee;
(h) "pay" and "payment" as applied in relation to stocks and securities and in connection with the expression "into court" include the deposit or transfer of stocks and securities in or into court;
(i) "personal representative" means the executor, original or by representation, or administrator for the time being of a deceased person;
(j) "possession" includes receipt of rents and profits or the right to receive rents and profits, if any; "income" includes rents and profits; and "possessed" applies to receipt of income of and to any vested estate less than a life interest in possession or in expectancy in any land;
(k) "property" includes immovable and movable property, and any estate, share and interest in any property, immovable or movable, and any debt, and any thing in action, and any other right or interest, whether in possession or not;
(l) "rights" includes estates and interests;
(m) "sale" includes an exchange;
(n) "securities" includes stocks, funds and shares; and "securities payable to bearer" includes securities transferable by delivery or by delivery and endorsement;
(o) "stock" includes fully paid up shares, and so far as relates to vesting orders made by the court under this Act, includes any fund, annuity, or security transferable in books kept by any company or society, or by instrument of transfer either alone or accompanied by other formalities, and any share or interest therein;
(p) "transfer" in relation to land or any estate or interest in it as applied to any person includes the execution by that person of every instrument or document (including an assent) for transferring, assigning, appointing, surrendering or otherwise disposing of land of which he or she is seized or possessed or in which he or she is entitled to a contingent right, either for his or her whole estate or for any less estate together with the performance of all formalities required by law for the validity of the transfer and as applied to any instrument or document means an instrument which is capable of being registered under the Registration of Titles Act;
(q) "transfer" in relation to stock or securities includes the performance and execution of every deed, power of attorney, act and thing on the part of the transferor to effect and complete the title in the transferee;
(r) "trust" does not include the duties incident to an estate conveyed by way of mortgage, but with this exception, "trust" and "trustee" extend to implied and constructive trusts, and to cases where the trustee has a beneficial interest in the trust property, and to the duties incident to the office of a personal representative, and "trustee" where the context admits, includes a personal representative, and "new trustee" includes an additional trustee;
(s) "trust corporation" means the public trustee or a corporation appointed by the court in any particular case to be a trustee or a corporation entitled under any Act to act as a custodian trustee;
(t) "trust for sale" in relation to land means an immediate binding trust for sale, whether or not exercisable at the request or with the consent of any person, and with or without power at discretion to postpone the sale;
(u) "trustees for sale" means the persons, including a personal representative, holding land on trust for sale.
(1) This Act, except where otherwise expressly provided, applies to trusts, including so far as this Act applies thereto, executorships and administratorships constituted or created either before or after the commencement of this Act.
(2) The powers conferred by this Act on trustees are in addition to the powers conferred by the instrument, if any, creating the trust, but those powers, unless otherwise stated, apply if and so far only as a contrary intention is not expressed in the instrument, if any, creating the trust, and have effect subject to the terms of that instrument.
(3) This Act does not affect the legality or validity of anything done before the commencement of this Act, except as otherwise hereafter expressly provided.
PART II
INVESTMENTS.
A trustee may invest any trust funds in his or her hands, whether at the time in a state of investment or not, in the following manner—
(a) in any securities in which trustees in England are for the time being authorised by the law of England to invest trust funds;
(b) in any securities the interest on which is guaranteed by the Government of Uganda or of Kenya or of Tanzania;
(c) in any public debentures issued under the authority of or guaranteed by any Act of Uganda or of Kenya or of Tanzania;
(d) in any stock or securities issued in respect of any loan raised by the Government of Uganda or of Kenya or of Tanzania;
(e) in immovable property in Uganda held for a freehold or mailo estate in respect of which a certificate of title under the Registration of Titles Act has been issued or held on a leasehold estate for a term of years of which not less than 30 years is unexpired and which is not subject to a rent exceeding five percent of the unimproved value thereof or to any condition of reentry except for nonpayment of rent.
Every power conferred by section 3 shall be exercised according to the discretion of the trustee, but subject to any consent or direction required by the instrument, if any, creating the trust or by law with respect to the investment of the trust funds.
5. Power to retain investment.
A trustee shall not be liable for breach of trust by reason only of his or her continuing to hold an investment which has ceased to be an investment authorised by the trust instrument or by the general law.
6. Enlargement of powers of investment.
(1) A trustee having power to invest in freehold or mailo estate securities may invest and shall be deemed always to have had power to invest on mortgage of property held on a leasehold estate for a term of years of which not less than 30 years is unexpired, and not subject to a reservation of rent greater than five percent of the unimproved value thereof, or to any right of redemption or to any condition for reentry, except for nonpayment of rent.
(2) A trustee having power to invest in freehold or mailo estate securities shall accept the security in the form of a mortgage under the Registration of Titles Act.
(3) A trustee having power to invest in the mortgages or bonds of any railway company or of any other description of company may invest in the debenture stock of a railway company or such other company as aforesaid.
7. Investment in bearer securities.
(1) A trustee may, unless expressly prohibited by the instrument creating the trust, retain or invest in securities payable to bearer which, if not so payable, would have been authorised investments; but securities to bearer retained or taken as an investment by a trustee (not being a trust corporation) shall, until sold, be deposited by the trustee for safe custody and collection of income with a banker or banking company.
A direction that investments shall be retained or made in the name of a trustee shall not, for the purposes of this subsection, be deemed to be such an express prohibition as aforesaid.
(2) A trustee shall not be responsible for any loss incurred by reason of such deposit, and any sum payable in respect of the deposit and collection shall be paid out of the income of the trust property.
8. Loans and investments by trustees not chargeable as breaches of trust.
(1) A trustee lending money on the security of any property on which he or she can properly lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made, if it appears to the court—
(a) that in making the loan the trustee was acting upon a report as to the value of the property made by a person whom the trustee reasonably believed to be an able practical surveyor or valuer instructed and employed independently of any owner of the property, whether such surveyor or valuer carried on business in the locality where the property is situate or elsewhere;
(b) that the amount of the loan does not exceed two-third parts of the value of the property as stated in the report; and
(c) that the loan was made under the advice of the surveyor or valuer expressed in the report.
(2) A trustee lending money on the security of any leasehold property shall not be chargeable with breach of trust only upon the ground that in making the loan the trustee dispensed either wholly or partly with the production or investigation of the lessor's title.
(3) This section applies to transfers of existing securities as well as to new securities and to investments made before as well as after the commencement of this Act.
9. Liability for loss by reason of improper investment.
(1) Where a trustee improperly advances trust money on a mortgage security which would at the time of the investment be a proper investment in all respects for a smaller sum than is actually advanced on it, the security shall be deemed an authorised investment for the smaller sum, and the trustee shall only be liable to make good the sum advanced in excess of that sum with interest.
(2) This section applies to investments made before as well as after the commencement of this Act.
10. Powers supplementary to powers of investment.
(1) Trustees lending money on the security of any property on which they can lawfully lend may contract that the money shall not be called in during any period not exceeding seven years from the time when the loan was made, provided interest be paid within a specified time not exceeding 30 days after every half yearly or other day on which it becomes due, and provided there be no breach of any covenant by the mortgagor contained in the instrument of mortgage or charge for the maintenance and protection of the property.
(2) On a sale of land for a freehold or mailo estate, or on a leasehold estate for a term of years of which not less than 30 years is unexpired, by trustees, the trustees may, where the proceeds are liable to be invested, contract that the payment of any part, not exceeding two-thirds, of the purchase money shall be secured by a mortgage of the land sold, with or without the security of any other property, that mortgage, if any buildings are comprised in the mortgage, to contain a covenant by the mortgagor to keep them insured against loss or damage by fire to the full value of the buildings with an insurance company approved by the trustees.
(3) The trustees shall not be bound to obtain any report as to the value of the land or other property to be comprised in such mortgage, or any advice as to the making of the loan, and shall not be liable for any loss which may be incurred by reason only of the security being insufficient at the date of the mortgage.
(4) Where any securities of a company are subject to a trust, the trustees may concur in any scheme or arrangement—
(a) for the reconstruction of the company;
(b) for the sale of all or any part of the property and undertaking of the company to another company;
(c) for the amalgamation of the company with another company;
(d) for the release, modification or variation of any rights, privileges or liabilities attached to the securities or any of them,
in like manner as if they were entitled to such securities beneficially, with power to accept any securities of any denomination or description of the reconstructed or purchasing or new company in lieu of or in exchange for all or any of the first mentioned securities; and the trustees shall not be responsible for any loss occasioned by any act or thing so done in good faith, and may retain any securities so accepted as aforesaid for any period for which they could have properly retained the original securities.
(5) If any conditional or preferential right to subscribe for any securities in any company is offered to trustees in respect of any holding in such company, they may, as to all or any of such securities, either exercise such right and apply capital money subject to the trust in payment of the consideration, or renounce such right, or assign for the best consideration that can be reasonably obtained the benefit of such right or the title to it to any person, including any beneficiary under the trust, without being responsible for any loss occasioned by any act or thing so done by them in good faith; but the consideration for any such assignment shall be held as capital money of the trust.
(6) The powers conferred by this section shall be exercisable subject to the consent of any person whose consent to a change of investment is required by law or by the instrument, if any, creating the trust.
(7) Where the loan referred to in subsection (1), or the sale referred to in subsection (2), is made under the order of the court, the powers conferred by those subsections respectively shall apply only if and as far as the court may by order direct.
11. Power to deposit money at bank and to pay calls.
(1) Trustees may, pending the negotiation and preparation of any mortgage, or during any other time while an investment is being sought for, pay any trust money into a bank to a deposit or other account, and all interest, if any, payable in respect of the account shall be applied as income.
(2) Trustees may apply capital money subject to a trust in payment of the calls on any shares subject to the same trust.
PART III
GENERAL POWERS OF TRUSTEES AND PERSONAL REPRESENTATIVES.
General powers.
12. Power of trustees for sale to sell by auction, etc.
(1) Where a trust for sale or a power of sale of property is vested in a trustee, the trustee may sell or concur with any other person in selling all or any part of the property either subject to prior charges or not, and either together or in lots, by public auction or by private contract, subject to any such conditions respecting title or
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