1 Trustee LAWS OF MALAYSIA REPRINT Act 208 TRUSTEE ACT 1949 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 2 TRUSTEE ACT 1949 First enacted ... ... ... ... ... ... 1949 (Ordinance No. 66 of 1949); and 1965 (Act No. 36 of 1965) Revised ... ... ... ... ... ... ... 1978 (Act 208 w.e.f. 15 November 1978) PREVIOUS REPRINT First Reprint ... ... ... ... ... 2001 3 LAWS OF MALAYSIA Act 208 TRUSTEE ACT 1949 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title 2. Application 3. Interpretation PART II INVESTMENTS 4. Authorized investments 5. Further powers of investment of trustees 6. Duty of trustees in choosing investments 7. Statutory powers of investment 8. Purchase at premium of redeemable stocks; change of character of investments 9. Discretion of trustees 10. Power to retain investment which has ceased to be authorized 11. Investment in bearer securities 12. Loans and investments by trustees not chargeable as breaches of trust 13. Liability for loss by reason of improper investment 14. Powers supplementary to powers of investment 15. Power to deposit at bank and to pay calls 4 ACT 208 Laws of Malaysia PART III GENERAL POWERS OF TRUSTEES AND PERSONAL REPRESENTATIVES General Powers Section 16. Power of trustees for sale to sell by auction, etc. 17. Power to sell subject to depreciatory conditions 18. Power of trustees to give receipts 19. Power to compound liabilities 20. Power of trustees of renewable leaseholds to renew and raise money for the purpose 21. Power to raise money by sale, charge, etc. 22. Protection to purchasers and chargees dealing with trustees 23. Devolution of powers or trust 24. Power to insure 25. Application of insurance money where policy kept up under any trust, power or obligation 26. Deposit of documents for safe custody 27. Reversionary interests, valuations and audit 28. Power to employ agents 29. Power to concur with others 30. Power to delegate trusts during absence abroad Indemnities 31. Protection against liability in respect of rents and covenants 32. Protection by means of advertisement 33. Protection in regard to notice 34. Exoneration of trustees in respect of certain powers of attorney 35. Implied indemnity of trustees Maintenance, Advancement and Protective Trusts 36. Power to apply income for maintenance and to accumulate surplus income during a minority 37. Power of advancement 38. Protective trusts 5 Trustee PART IV APPOINTMENT AND DISCHARGE OF TRUSTEES Section 39. Limitation of the number of trustees 40. Power of appointing new or additional trustees 41. Supplemental provisions as to appointment of trustees 42. Evidence as to a vacancy in a trust 43. Retirement of trustee without a new appointment 44. Vesting of trust property in new or continuing trustees PART V POWERS OF THE COURT 45. Power of Court to appoint new trustees 46. Power to authorize remuneration 47. Powers of new trustee appointed by the Court Vesting Orders 48. Vesting orders of land 49. Orders as to contingent rights of unborn persons 50. Vesting order in place of conveyance by minor 51. Vesting order consequential on order for sale of land 52. Vesting order consequential on judgment for specific performance, etc. 53. Effect of vesting order 54. Power to appoint person to convey 55. Vesting orders as to stock and thing in action 56. Vesting orders of charity or society property 57. Vesting orders in relation to minor's beneficial interest 58. Orders made upon certain allegations to be conclusive evidence Jurisdiction to make other Order 59. Power of Court to authorize dealings with trust property 60. Persons entitled to apply for orders 61. Power to give judgment in absence of a trustee 6 ACT 208 Laws of Malaysia Section 62. Power to charge costs on trust estate 63. Power to relieve trustee from personal liability 64. Power to make beneficiary indemnity for breach of trust Payment into Court 65. Payment into Court by trustees PART VI GENERAL PROVISIONS 66. Indemnity 67. Effect of order of Court 68. Validation of certain powers of trustees 69. Repeal SCHEDULE 7 Trustee LAWS OF MALAYSIA Act 208 TRUSTEE ACT 1949 An Act relating to Trustees. [Peninsular Malaysia--31 December 1949; Sabah and Sarawak--30 June 1965] PART I PRELIMINARY Short title 1. This Act may be cited as the Trustee Act 1949. Application 2. (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 expressly provided. 8 ACT 208 Laws of Malaysia Interpretation 3. (1) In this Act, unless the context otherwise requires-- "approved company" means a company-- (a) incorporated in Malaysia or, if incorporated prior to Malaysia Day, in Sabah or Sarawak, and having a place of business in Malaysia; (b) having as its sole or primary object the promotion of home ownership by advancing for the purchase of lands and buildings sums of money, repayable by instalments of principal and interest over a fixed period of years, not exceeding at any time the valuation of such lands and buildings made by an approved valuer; and (c) approved by the Minister by notification in the Gazette for the purpose of receiving loans from trustees in accordance with paragraph 4(1)(e); "approved valuer" means a registered or licensed surveyor or a licensed appraiser and includes any other person approved by the Minister; "authorized investments" means investments authorized by the instrument, if any, creating the trust for the investment of money subject to the trust, or by law; " c h a r g e " , "chargee" and "chargor" include "mortgage", "mortgagee" and "mortgagor" respectively, and further include and relate to every estate and interest regarded in equity as merely a security for money and every person lawfully claiming under the original chargee; "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; "convey" and "conveyance" as applied to any person include the execution by that person of every necessary or suitable assurance ( i n c l u d i n g an assent) for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of land whereof he is proprietor or possessed or wherein he is entitled to a contingent 9 Trustee right, either for his whole interest or for any less interest, together with the performance of all formalities required by law to the validity of the conveyance; "the Court" means the High Court in Malaya or the High Court in Sabah and Sarawak, as the case may be; "instrument" includes a written law; "land" means immovable property and includes any interest therein and also an undivided share of land; "material" date means-- (a) in respect of Peninsular Malaysia (other than Malacca and Penang), the 9th day of September 1932; (b) in respect of the States of Malacca and Penang, the 1st day of September 1929; (c) in respect of the State of Sabah (other than Labuan), the 30th day of April 1953; (d) in respect of Labuan, the 1st day of September 1929; and (e) in respect of the State of Sarawak, the 30th day of June 1965; "mentally disordered person" means any person found by due course of law to be unsound mind and incapable of managing his affairs; "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 the same in or into Court; "person of unsound mind" means any person, not a minor, who, not having been found to be a mentally disordered person, is incapable from infirmity of mind of managing his own affairs; "personal representative" means the executor, original or by representation, or administrator for the time being of a deceased person; "possession" includes receipt of rents and profits or the right to receive the same, if any; "income" includes rents and profits; and 10 ACT 208 Laws of Malaysia "possessed" applies to receipt of income of and to any vested interest less than a life interest in possession or in expectancy in any land; "property" includes movable and immovable property, and any interest in any property, movable or immovable, and any debt, and any thing in action, and any other right or interest, whether in possession or not; "rights" includes estates and interests; "sale" includes an exchange; "securities" includes stocks, funds and shares; and so far as relates to payments into Court has the same meaning as in the written law relating to funds in Court; and "securities payable to bearer" includes securities transferable by delivery or by delivery and endorsement; "solicitor" means advocate and solicitor in Peninsular Malaysia or advocate in Sabah or Sarawak, as the case may be; "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 corporation, company, association, or society, or by instrument of transfer, either alone or accompanied by other formalities, and any share or interest therein; "transfer", in relation to stock or securities, includes the execution and performance of every instrument, power of attorney, act, and thing on the part of the transferor to effect and complete the title in the transferee; "trust" does not include the duties of chargee, but with this exception the expressions "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 incidental to the office of a personal representative and "trustee", where the context admits, includes a personal representative, and "new trustee" includes an additional trustee; "trust corporation" means the Public Trustee* or a corporation appointed by the Court in any particular case to be a trustee, or registered as a trust company under the Trust Companies Act 1949 [Act 100]; *NOTE--The words "Public Trustee" is now refered to as"corporation" under the name of Amanah Raya Berhad incorporated under the Companies Act 1965 [Act 125] pursuant to section 3­see section 2 and subsection 43(3) of the Public Trust Corporation Act 1995 [Act 532]. 11 Trustee "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; "trustees for sale" means the persons (including a personal representative) holding land on trust for sale. *"Peninsular Malaysia" has the meaning assigned by section 3 Interpretation Acts 1948 and 1967 [Act 388], and includes the Federal Territory. (2) In relation to the application of this Act to Sabah and Sarawak, references in this Act to any written law in force in Peninsular Malaysia or any part thereof shall-- (a) if such written law has been extended to apply to Sabah and Sarawak, be construed as references to that law as so extended; or (b) if such written law has not been extended to Sabah or Sarawak, be construed as reference to the corresponding written law, if any, in force in Sabah or Sarawak, as the case may be. (3) References in this Act to the commencement of this Act mean, in the case of Peninsular Malaysia, 31st day of December 1949; and, in the case of Sabah and Sarawak, 30th day of June 1965. PART II INVESTMENTS Authorized investments 4. (1) A trustee may invest any trust funds in his hands, whether at the time in a state of investment or not, in manner following: (a) in any of the securities of the Federal Government or the Government of the State of Sabah or the State of Sarawak or of the Republic of Singapore; (b) in any securities the interest on which is or shall be guaranteed by Parliament or by the Federal Government; *NOTE--All references to "West Malaysia" shall be construed as references to "Peninsular Malaysia"­ see Interpretation (Amendment) Act 1997 [Act A996], subsection 5(2). 12 ACT 208 Laws of Malaysia (c) in or upon titles to immovable property in Malaysia, such titles being freehold titles or grants in perpetuity or leases (other than mining leases) for a term thereof sixty years at least is unexpired at the time of such investment: Provided that-- (i) the land to which any such title relates shall be situate within the limits of any City, Municipality, Town Council or Town Board area; and (ii) there be erected on the land to which such title relates houses or other buildings the gross rental whereof, together with the land appurtenant thereto, is at the time of such investment not less than seven per centum of the purchase price of the land, in the case of the purchase price, or of the value of such land, as ascertained under paragraph 12(1)(a), in the case of a charge. (d) in fixed interest securities issued in Malaysia with the approval of the Treasury by any public authority established under federal or State law; (e) in loans to an approved company; (f) in loans the principal and interest on which is or shall be guaranteed by the Federal Government, and may also from time to time vary any such investment as aforesaid. (2) No trust funds shall be invested under paragraph (1)(e) unless-- (a) the paid up ordinary share capital of the approved company is not less than five million ringgit; and (b) the approved company has paid a dividend at the rate of not less than five per centum upon such ordinary share capital during each of the last three years prior to the time of investment, and where the approved company is a company which has acquired the assets and liabilities of another approved company, payment of a dividend by that other company during each of the last three years prior to the time of such acquisition shall be treated as payment by the approved company; and 13 Trustee (c) the total amount of the borrowings of the approved company from all sources, whether trustee or not, accepted by the approved company on loan and deposit, and including interest due and thereon not repaid by the approved company, does not at any time exceed two thirds of the amount, excluding prospective interest, for the time being secured to the approved company from its borrowers. (3) Paragraph (1)(e) shall not be taken to override the provisions of paragraph 4(2)(c) of the *Employees Provident Fund Act 1951 [Act 272] (which confer express powers on the Trustees of the Employees Provident Fund to invest in loans to an approved company). Further powers of investment of trustee 5. (1) The investments specified in section 4 shall include any security to which this section applies and any units, or any shares of the investments subject to the trust, of a unit trust scheme approved by the Yang di-Pertuan Agong by notification published in the Gazette. (2) Subject to this section, this section applies to any securities issued by a company (whether incorporated in Malaysia or elsewhere) prices for which are quoted on the Stock Exchange of Malaysia. (3) This section does not apply to securities of any company unless-- (a) the total issued and paid-up share capital of the company is, or if converted into ringgit from currency other than ringgit is, five million ringgit or more; and (b) the company has in each of the five years immediately preceding the calendar year in which the investment is made paid a dividend on all the shares issued by the company, excluding any shares issued after the dividend was declared and any shares which by their terms of issue did not rank for the dividend for that year, and the rate exchange in relation to the conversion of issued and paid-up share capital shall be that certified by a bank manager, as defined in paragraph 6(3)(b), to be appropriate on the day a trustee exercises his power to invest in such securities. *NOTE--Employees Provident Fund Act 1951 [Act 272] has been repealed by Employees Provident Fund Act 1991 [Act 452]­see paragraph 75(a) of Act 452. 14 ACT 208 Laws of Malaysia (4) For the purposes of paragraph 3(b), a company formed-- (a) to take over the business of another company or other companies; or (b) to acquire the securities, or control, of another company or other companies; or (c) for either of those purposes and for other purposes, shall be deemed to have paid a dividend as mentioned in that paragraph in any year in which such a dividend has been so paid by the other company or all of the other companies, as the case may be. (5) This section does not apply to shares or debenture stock not fully paid up, except shares or stock which by the terms of issue are required to be fully paid up within nine months of the date of issue. (6) No provision relating the powers of the trustee contained in any instrument made before 30th day of June 1965 shall limit the powers conferred by this section, but those powers are exercisable only in so far as a contrary intention is not expressed in any instrument so relating which is made after 29th day of June 1965. Duty of trustees in choosing investments 6. (1) In the exercise of any of his powers of investment a trustee shall have regard-- (a) to the need for diversification of the investments of the trust, in so far as is appropriate to the circumstances of the trust, and to the degree of risk attaching to the holding of any particular investment or of investments of any particular description; and (b) to the suitability to the trust of investment of the description of investment proposed and of the investment proposed as an investment of that description. (2) A trustee whose power of investment is restricted to the making of investments specified in section 4, shall, before exercising any power to invest in such securities, units or shares as are mentioned in section 5, obtain proper advice on the question whether 15 Trustee the investment is satisfactory having regard to the matters mentioned in paragraph (1)(a) and (b), and shall consider the advice obtained: Provided that this subsection shall not apply to the Public Trustee* and to trust companies defined in the Trust Companies Act 1949. (3) (a) For the purposes of subsection (2) proper advice is either the advice of a stock broker obtained through the trustee's bank manager or the advice of an authorized accountant. (b) In this subsection "bank manager" means the manager of a bank (including a branch of a bank) licensed under section 3 of the Banking Act 1973 [Act 102]**, and "authorized accountant" means a person authorized in writing under any written law relating to companies, to be an auditor of companies generally. (4) A trustee retaining any such security, unit or part as is mentioned in section 5 shall determine at what intervals the circumstances, and in particular the nature of the investment, make it desirable to obtain such advice as aforesaid, and shall obtain and consider such advice accordingly. (5) A trustee shall not be treated as having complied with subsections (2) to (4) unless the advice was given, or has been subsequently confirmed, in writing. (6) Subsections (2) to (4) shall not apply to one of two or more trustees where he is the person giving the advice required by this section to his co-trustee or co-trustees. Statutory powers of investment 7. (1) In the case of trustees constituted under any written law, section 5 shall apply only in so far as the Minister may direct. (2) Where any body of persons, not being trustees, have under any written law power (however expressed) to make the like investments as trustees are for the time being authorized by law to make, section 5 shall not apply to the body except in so far as the Minister may direct. *NOTE--The words "Public  Trustee" is now refered to as "corporation" under the name of Amanah Raya Berhad incorporated under the Companies Act 1965 [Act 125] pursuant to section 3­see section 2 and subsection 43(3) of the Public Trust Corporation Act 1995 [Act 532]. **NOTE--Banking Act 1973 [Act 102] has been repealed by Banking and Financial Institutions Act 1989 [Act 372]­see subsection 128(1) of Act 372. 16 ACT 208 Laws of Malaysia (3) The Minister may direct that any specified body of persons, not being trustees constituted under any written law, which apart from this subsection would not have the like power of investment as is conferred by section 5, shall have that power to such extent as may be specified in the direction. (4) Any direction under this section may be given generally or in a particular case, and unconditionally or subject to conditions. Purchase at premium of redeemable stocks; change of character of investments 8. (1) A trustee may under the powers of this Act invest in any of the securities mentioned or referred to in section 4, notwithstanding that the same may be redeemable, and that the price exceeds the redemption value. (2) A trustee may retain until redemption any redeemable stock, fund, or security which may have been purchased in accordance with the powers of this Act, or any written law replaced by this Act. Discretion of trustees 9.  Every power conferred by sections 4 and 8 shall be exercised according to the discretion of the trustee, but subject to any consent or direction, with respect to the investment of the trust funds, required by the instrument, if any, creating the trust or by any written law. Power to retain investment which has ceased to be authorized 10.  A trustee shall not be liable for breach of trust by reason only of his continuing to hold an investment which has ceased to be an investment authorized by the trust instrument or by this Act. Investment in bearer securities 11. (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 authorized investments. 17 Trustee (2) Securities payable to bearer retained or taken as an investment by a trustee shall, until sold, be deposited by him for safe custody and collection of income with a banker or banking company. (3) A direction that investments shall be retained or made in the name of a trustee shall not, for the purposes of this section, be deemed to be such an express prohibition as aforesaid. (4) A trustee shall not be responsible for any loss incurred by reason of such deposit, and any sum payable in respect of such deposit and collection shall be paid out of the income of the trust property. Loans and investments by trustees not chargeable as breaches of trust 12. (1) A trustee lending money on the security of any property on which he 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 he 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 he dispensed either wholly or partly with the production or investigation of the lessor's title. (3) A trustee shall not be chargeable with breach of trust only upon the ground that in effecting the purchase, or in lending money upon the security, of any property he has accepted a shorter title than the title which a purchaser is, in the absence of a special 18 ACT 208 Laws of Malaysia contract, entitled to require, if in the opinion of the Court the title accepted be such as a person acting with prudence and caution would have accepted. (4) 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. Liability for loss by reason of improper investment 13. (1) Where a trustee improperly advances trust money on the security of a charge which would at the time of the investment be a proper investment in all respects for a smaller sum than is actually advanced thereon, the security shall be deemed an authorized investment for the smaller sum, and the trustee shall only be liable to make good the sum advanced in excess thereof with interest. (2) This section applies to investments made before as well as after the commencement of this Act. Powers supplementary to powers of investment 14. (1) Trustees lending money on the security of any property on which they can lawfully lend may contract that such money shall not be called in during any period not exceeding five years from the time when the loan was made, provided interest be paid within a specified time not exceeding ten days after every monthly or other day on which it becomes due, and provided there be no breach of any covenant by the chargor contained in the instrument of charge for the maintenance and protection of the property. (2) On a sale by trustees of land 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 charge of the land sold, with or without the security of any other property, but the charge, if any buildings are comprised therein, shall contain a covenant by the chargor to keep the buildings insured against loss or damage by fire to the full value thereof. (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 charge, 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 in sufficient at the date of the charge. 19 Trustee (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) or the sale of all or any part of the property and undertaking of the company to another company; (c) for the acquisition of the securities of the company, or of control, by another company; (d) for the amalgamation of the company with another company; (e) 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 the 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 the company, they may as to all or any of those 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 thereto 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: Provided that 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. 20 ACT 208 Laws of Malaysia (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 if and as far as the Court may by order direct. Power to deposit at bank and to pay calls 15. (1) Trustees may, pending the negotiation and preparation of any charge, 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 thereof 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 Power of trustees for sale to sell by auction, etc. 16. (1) Where a trust for sale or a power for sale of property is vested in a trustee, he 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 evidence of title or other matter as the trustee thinks fit, with power to vary any contract for sale, or to rescind any contract for sale and to resell, without being answerable for any loss. (2) A trust or power to sell or dispose of land includes a trust or power to sell or dispose of part thereof, whether the division is horizontal, vertical, or made in any other way. Power to sell subject to depreciatory conditions 17. (1) No sale made by a trustee shall be impeached by any beneficiary upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it also appears that the consideration for the sale was rendered inadequate. 21 Trustee (2) No sale made by a trustee shall, after the execution of the conveyance, be impeached as against the purchaser upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it appears that the purchaser was acting in collusion with the trustee at the time when the contract for sale was made. (3) No purchaser, upon any sale made by a trustee, shall be at liberty to make any objection against the title upon any of the grounds aforesaid. (4) This section applies to sales made before or after the commencement of this Act. Power of trustees to give receipts 18. (1) The receipt in writing of a trustee for any money, securities, or other personal property or effects payable, transferable, or deliverable to him under any trust or power shall be a sufficient discharge to the person paying, transferring, or delivering the same and shall effectually exonerate him from seeing to the application or being answerable for any loss or misapplication thereof. (2) This section does not, except where the trustee is a trust corporation, enable a sole trustee to give a valid receipt for the proceeds of sale or other capital money arising under a trust for sale of land. (3) Notwithstanding anything to the contrary in a disposition on trust for sale of land or in the settlement of the net proceeds, the proceeds of sale or other capital money arising under the disposition shall not be paid to or applied by the direction of fewer than two persons as trustees of the disposition, except where the trustee is a trust corporation, but this subsection does not affect the right of a sole personal representative as such to give valid receipts for or direct the application of the proceeds of sale or other capital money aforesaid; nor, except where capital money arises on a transaction, render it necessary to have more than one trustee. (4) This section applies notwithstanding anything to the contrary in the instrument, if any, creating the trust. 22 ACT 208 Laws of Malaysia Power to compound liabilities 19.  A personal representative, or two or more trustees acting together, or a sole acting trustee where by the instrument, if any, creating the trust, or by written law, a sole trustee is authorized to execute the trust and powers reposed in him, may, if and as he or they think fit-- (a) accept any property, before the time at which it is made transferable or payable; (b) sever and apportion any blended trust funds or property; (c) pay or allow any debt or claim on any evidence that he or they think sufficient; (d) accept any composition or any security for any debt, or for any property, claimed; (e) allow any time for payment of any debt; or (f) compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the testator's or intestate's estate or to the trust, and for any of those purposes may enter into, give, execute and do such agreements, instruments of composition or arrangement, releases, and other things as to him or them seem expedient, without being responsible for any loss occasioned by any act or thing so done by him or them in good faith. Power of trustees of renewable leaseholds to renew and raise money for the purpose 20. (1) A trustee of any leaseholds which are renewable from time to time either under any covenant or contract or by custom or usual practice may, if he thinks fit, and shall, if thereto required by any person having any beneficial interest, present or future or contingent, in the leaseholds, use his best endeavours to obtain from time to time a renewed leased of the same property on the accustomed and reasonable terms and for that purpose may from time to time make or concur in making a surrender of the lease for the time being subsisting and do all such other acts as are requisite: Provided that, where by the terms of the settlement or will the person in possession for his life or other limited interest is entitled 23 Trustee to enjoy the same without any obligation to renew or to contribute to the expense of renewal, this section shall not apply unless the consent in writing of that person is obtained to the renewal on the part of the trustee. (2) If money is required to pay for the renewal, the trustee effecting the renewal may pay the same out of any money then in his hands in trust for the persons beneficially interested in the lands to be comprised in the renewed lease, and if he has not in his hands sufficient money for the purpose he may raise the money required by charge of the property to be comprised in the renewed lease or of any other property for the time being subject to the trusts to which that property is subject; and no person advancing money upon a charge purporting to be under this power shall be bound to see that the money is wanted or that no more is raised than is wanted for the purpose or otherwise as to the application thereof. Power to raise money by sale, charge, etc. 21. (1) Where trustees are authorized by the instrument, if any, creating the trust or by law to pay or apply capital money subject to the trust for any purpose or in any manner, they shall have and shall be deemed always to have had power to raise the money required by sale, conversion, calling in, or charge of all or any part of the trust property for the time being in possession. (2) This section applies notwithstanding anything to the contrary contained in the instrument, if any, creating the trust, but does not apply to trustees of property held for charitable purposes. Protection to purchasers and chargees dealing with trustees 22.  No purchaser or chargee, paying or advancing money on a sale or charge purporting to be made under any trust or power vested in trustees, shall be concerned to see that the money is wanted, or that no more than is wanted is raised, or otherwise as to the application thereof. 24 ACT 208 Laws of Malaysia Devolution of powers or trust 23. (1) Where a power of trust is given to or imposed on two or more trustees jointly, the same may be exercised or performed by the survivors or survivor of them for the time being. ( 2 ) U n t i l the appointment of new trustees, the personal representatives or representative for the time being of a sole trustee, or, where there were two or more trustees, of the last surviving or continuing trustee, shall be capable of exercising or performing any power or trust which was given to, or capable of being exercised by, the sole or last surviving or continuing trustee, or other the trustees or trustee for the time being of the trust. (3) In this section "personal representative" does not include an executor who has renounced or has not proved. Power to insure 24. (1) A trustee may insure against loss or damage by fire any building or other insurable property to any amount, including the amount of any insurance already on foot, up to the full value of the building or property, and pay the premiums for the insurance out of the income thereof or out of the income of any other property subject to the same trusts without obtaining the consent of any person who may entitled wholly or partly to the income. (2) This section does not apply to any building or property which a trustee is bound forthwith to convey absolutely to any beneficiary upon being requested to do to. Application of insurance money where policy kept up under any trust, power or obligation 25. (1) Money receivable by trustees or any beneficiary under a policy of insurance against the loss or damage of any property subject to a trust, whether by fire or otherwise, shall, where the policy has been kept up under any trust in that behalf or under any power, statutory or otherwise, or in performance of any covenant or of any obligation, statutory or otherwise, or by tenant for life impeachable for waste, be capital money for the purpose of the trust. 25 Trustee (2) If any such money is receivable by any person, other than the trustees of the trust, that person shall use his best endeavour to recover and receive the money, and shall pay the net residue thereof after discharging any costs of recovering and receiving it, to the trustees of the trust, or if there are no trustees capable of giving a discharge, into the Court. (3) Any such money-- (a) if it was receivable in respect of property held upon trust for sale, shall be held upon the trusts and subject to the powers and provisions applicable to money arising by a sale under the trust; and (b) in any other case, shall be held upon trusts corresponding as nearly as may be with the trusts affecting the property in respect of which it was payable. (4) Such money, or any part thereof, may also be applied by the trustees, or, if in the Court, under the direction of the Court, in rebuilding, reinstating, replacing, or repairing the property loss or damaged, but any such application by the trustees shall be subject to the consent of any person whose consent is required by the instrument, if any, creating the trust to the investment of money subject to the trust. (5) Nothing contained in this section prejudices or affects the right of any person to require any such money or any part thereof to be applied in rebuilding, reinstating, or repairing the property lost or damaged, or the right of any chargee, lessor, or lessee, whether under any written law, or otherwise. (6) This section applies to policies effected either before or after the commencement of this Act, but only to money received after the commencement. Deposit of documents for safe custody 26.  Trustees may deposit any documents held by them, relating to the trust, or the trust property, with any banker or banking company or any other company whose business includes the undertaking of the safe custody of documents, and any sum payable in respect of such deposit shall be paid out of the income of the trust property. 26 ACT 208 Laws of Malaysia Reversionary interests, valuations and audit 27. (1) Where trust property includes any share or interest in property not vested in the trustees, or the proceeds of the sale of any such property, or any other thing in action, the trustees on the same falling into possession, or becoming payable or transferable may-- (a) agree or ascertain the amount or value or any part in such manner as they may think fit; (b) accept in or towards satisfaction thereof, at the market or current value, or upon any valuation or estimate of value which they may think fit, any authorized investments; (c) allow any deductions for duties, costs, charges and expenses which they may think proper or reasonable; (d) execute any release in respect of the premises so as effectually to discharge all accountable parties from all liability in respect of any matters coming within the scope of such release, without being responsible in any such case for any loss occasioned by any act or thing so done by them in good faith. (2) The trustees shall not be under any obligation and shall not be chargeable with any breach of trust by reason of any omission-- (a) to apply for any stop or other like order upon any securities or other property out of or on which such share or interest or other thing in action as aforesaid is derived, payable or charged; or (b) to take any proceedings on account of any act, default, or neglect on the part of the persons in whom the securities or other property or any of them or any part thereof are for the time being, or had at any time been, vested, unless and until required in writing so to do by some person, or the guardian of some person, beneficially interested under the trust, and unless also due provision is made to their satisfaction for payment of the costs of any proceedings required to be taken: Provided that nothing in this subsection shall relieve the trustees of the obligation to get in and obtain payment or transfer of the share or interest or other thing in action on the same falling into possession. 27 Trustee (3) Trustees may, for the purpose of giving effect to the trust, or any of the provisions of the instrument, if any, creating the trust or of any written law, from time to time (by duly qualified agents) ascertain and fix the value of any trust property in such manner as they think proper, and any valuation so made in good faith shall be binding upon all persons interested under the trust. (4) Trustees may, in their absolute discretion, from time to time, but not more than once in every year unless the nature of the trust or any special dealings with the trust property make a more frequent exercise of the right reasonable, cause the accounts of the trust property to be examined or audited by an independent accountant, and shall, for that purpose, produce such voucher and give such information to him as he may require, and the costs of the examination or audit, including the fee of the auditor, shall be paid out of the capital or income of the trust property, or partly in one way and partly in the other as the trustees, in their absolute discretion, think fit, but, in default of any direction by the trustees to the contrary in any special case, costs attributable to capital shall be borne by capital and those attributable to income by income. Power to employ agents 28. (1) Trustees or personal representatives may, instead of acting personally, employ and pay an agent, whether a solicitor, banker, stockbroker, or other person, to transact any business or do any act required to be transacted or done in the execution of the trust, or the administration of the testator's or intestate's estate, including the receipt and payment of money, and shall be entitled to be allowed and paid all charges and expenses so incurred, and shall not be responsible for the default of any such agent if employed in good faith. (2) Trustees or personal representatives may appoint any person to act as their agent or attorney for the purpose of selling, converting, collecting, getting in, and executing and perfecting assurances of, or managing or cultivating, or otherwise administering any property, movable or immovable, subject to the trust or forming part of the testator's or intestate's estate, in any place outside Malaysia or executing or exercising any discretion or trust or power vested in them in relation to any such property, with such ancillary powers, 28 ACT 208 Laws of Malaysia and with and subject to such provisions and restrictions as they may think fit, including a power to appoint substitutes, and shall not, by reason only of their having made such appointment, be responsible for any loss arising thereby. (3) (a) Without prejudice to such general power of appointing agents as aforesaid-- (i) a trustee may appoint a solicitor to be his agent to receive a n d give a discharge for any money or valuable consideration or property receivable by the trustees under the trust, by permitting the solicitor to have the custody of, and to produce, an instrument having in the body thereof or endorsed a receipt for such money or valuable consideration or property, the instrument being executed, or the endorsed receipt being signed, by the person entitled to give a receipt for that consideration; (ii) a trustee shall not be chargeable with breach of trust by reason only of his having made or concurred in making any such appointment; and the production of any such instrument by the solicitor shall have the same statutory validity and effect as if the person appointing the solicitor had not been a trustee; and (iii) a trustee may appoint a banker or solicitor to be his agent to receive and give a discharge for any money payable to the trustee under or by virtue of a policy of insurance, by permitting the banker or solicitor to have the custody of and to produce the policy of insurance with a receipt signed by the trustee, and a trustee shall not be chargeable with a breach of trust by reason only of his having made or concurred in making any such appointment: Provided that nothing in this subsection shall exempt a trustee from any liability which he would have incurred if this Act and any written law replaced by this Act had not been passed, in case he permits any such money, valuable consideration, or property to remain in the hands or under the control of the banker or solicitor for a period longer than is reasonably necessary to enable the banker or solicitor, as the case may be, to pay or transfer the same to the trustee. (b) This subsection applies whether the money or valuable consideration or property was or is received before or after the commencement of this Act. 29 Trustee Power to concur with others 29.  Where an undivided share in the proceeds of sale of land directed to be sold, or in any other property, is subject to a trust, or forms part of the estate of a testator or intestate, the trustees or personal representatives may (without prejudice to the trust for sale affecting the entirety of the land and the powers of the trustees for sale in reference thereto) execute or exercise any trust or power vested in them in relation to such share in conjunction with the persons entitled to or having power in that behalf over the other share or shares, and notwithstanding that any one or more of the trustees or personal representatives may be entitled to or interested in any such other share, either in his or their own right or in a fiduciary capacity. Power to delegate trusts during absence abroad 30. (1) A trustee intending to remain out of Malaysia for a period exceeding fourteen days may, notwithstanding any rule of law or equity to the contrary, by power of attorney, delegate to any person (including a trust corporation) the execution or exercise during his absence from Malaysia of all or any trusts, powers and discretions vested in him as such trustee, either alone or jointly with any other person or persons: Provided that a person being the only other co-trustee and not being a trust corporation shall not be appointed to be an attorney under this subsection. (2) The donor of a power of attorney given under this section shall be liable for the acts or defaults of the donee in the same manner as if they were the acts or defaults of the donor. (3) The power of attorney shall not come into operation unless and until the donor is out of Malaysia and shall be revoked by his return or entry into Malaysia. (4) The power of attorney shall be verified by attestation in the manner required by the Powers of Attorney Act 1949 [Act 424], and a true copy or office copy thereof shall be deposited in a registry of the High Court as required by such Act, with a statutory declaration by the donor that he intends to remain out of Malaysia for a period exceeding fourteen days from the date of the declaration, or from a date therein mentioned. 30 ACT 208 Laws of Malaysia (5) The statutory declaration aforesaid and a statutory declaration by the donee of the power of attorney that the power has come into operation and has not been revoked by the return or entry into Malaysia of the donor shall be conclusive evidence of the facts stated in favour of any person dealing with the donee. (6) In favour of any person dealing with the donee, any act done or instrument executed by the donee shall, notwithstanding that the power has never come into operation or has become revoked by the act of the donor or by his death or otherwise, be as valid and effectual as if the donor were alive and of full capacity, and had himself done the act or executed the instrument, unless the person had actual notice that the power had never come into operation or of the revocation of the power before such act was done or instrument executed. (7) For the purpose of executing or exercising the trusts or powers delegated to him, the donee may exercise any of the powers conferred on the donor as trustee by law or by the instrument creating the trust, including power, for the purpose of the transfer of any inscribed stock, himself to delegate to an attorney power to transfer but not including the power of delegation conferred by this section. (8) The fact that it appears from any power of attorney given under this section, or from any evidence required for the purposes of any such power of attorney or otherwise, that in dealing with any stock the donee of the power is acting in the execution of a trust shall not be deemed for any purpose to affect any person in whose books the stock is inscribed or registered with any notice of the trust. (9) No power of attorney shall be operative for the purposes of this section for a longer period than three years after the date of execution. Indemnities Protection against liability in respect of rents and covenants 31. (1) Where a personal representative or trustee liable as such for-- (a) any rent, covenant or agreement reserved by or contained in any lease; 31 Trustee (b) any rent, covenant or agreement payable under or contained in any grant made in consideration of a rent charge; or (c) any indemnity given in respect of any rent, covenant or agreement referred to in either of the foregoing paragraphs, satisfies all liabilities under the lease or grant which may have accrued, and been claimed, up to the date of the conveyance hereinafter mentioned, and, where necessary, sets apart a sufficient fund to answer any future claim that may be made in respect of any fixed and ascertained sum which the lessee or grantee agreed to lay out on the property demised or granted, although the period for laying out the same may not have arrived, then and in any such case the personal representative or trustee may convey the property demised or granted to a purchaser, legatee, devisee or other person entitled to call for a conveyance thereof and thereafter-- (A) he may distribute the residuary estate of the deceased testator or intestate, or, as the case may be, the trust estate (other than the fund, if any, set apart as aforesaid) t o or amongst the persons entitled thereto, without appropriating any part, or any further part, as the case may be, of the estate of the deceased or of the trust estate to meet any future liability under the said lease or grant; and (B) notwithstanding any such distribution, he shall not be personally liable in respect of any subsequent claim under the said lease or grant. (2) This section operates without prejudice to the right of the lessor or grantor, or the persons deriving title under the lessor or grantor, to follow the assets of the deceased or the trust property into the hands of the persons amongst whom the same may have been respectively distributed, and applies notwithstanding anything to the contrary in the will or other instrument, if any, creating the trust. (3) In this section-- "grant" applies to a grant whether the rent is created by limitation, grant, reservation, or otherwise, and includes an agreement for a grant and any instrument giving any such indemnity as aforesaid or varying the liabilities under the grant; 32 ACT 208 Laws of Malaysia "lease" includes an underlease and an agreement for a lease or underlease and any instrument giving any such indemnity as aforesaid or varying the liability under the lease; "lessee" and "grantee" include persons respectively deriving title under them. Protection by means of advertisement 32. (1) With a view to the conveyance to or distribution among the persons entitled to any movable or immovable property, the trustees or personal representatives may give notice by advertisement in the Gazette, and such other like notices, including notices elsewhere than in Malaysia, as would, in any special case, have been directed by a court in an action for administration, of their intention to make such conveyance or distribution as aforesaid, and requiring any person interested to send to the trustees or personal representatives within the time, not being less than two months, fixed in the notice or, where more than one notice is given, in the last of the notices, particulars of his claim in respect of the property or any part thereof to which the notice relates. (2) At the expiration of the time fixed by the notice the trustees or personal representatives may convey or distribute the property or any part to which the notice relates, to or among the persons entitled, having regard only to the claims, whether formal or not, of which the trustees or personal representatives then had