UEQ 3622 

Equity & Trust 

Tutorial 6 Week 7 

Question 

Identify and discuss the different provisions that are relevant to appointing trustees.  Justify
the reasons for the different provisions in appointing trustees.

Who can become a trustee?

Westdeuthce landesbank – only can become trustee if he know and understand his obligation.

 Initial appointment
- Initial appointment is done by the settlor by declaring himself to become a trustee or nominate

other person to become trustee. This usually be done by way of trust deed.

- Initial trustee could be appointed in an inter vivos trustor a testamentary trust.

Phua chin Har v Amanah raya bhd

The court is under no duty to determine reasons for deceased’s appointment of the defendant as
trustee of her estate.

 Subsequent appointment

S40(1)(b) when no person is nominated, the continuing trustee for the time being may appoint new
trustees

Re East (1873) 8 Ch App 735A person was given a power of appointing new trustee if any original
trustee dies or became unwilling or unable to act. In this case, one of the 3 trustees became of unsound
mind. So, the other 2 trustees appointed a replacement trustee.

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S.40(3) when a corporation is incapable to act.

S40(8) - When the trustee is dead, subsequent trustee may be appointed. This is applicable when a
trustee predeceased the settlor.

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S.30(1) - When trustee stay outside federation for 12 months.

However, some case laws shows exception to this rule.

For instance, in Richard Mackay, the court stated that the court stated that in exceptional circumstances
,it is acceptable for trustee stay abroad. In Re Whitehead Will Trust, one of the exceptional
circumstances is when the beneficiaries are living in a foreign country, a trustee who is living in that
foreign country can be appointed.

However, some case laws shows exception to this rule.

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S.40(9) - Where a trustee is mentally disordered or of unsound mind1 and is also entitled in possession
to some beneficial interest in the trust property, no appointment of a trustee in his place may be made
by the continuing trustees or trustee unless leave has been given by the court to make the appointment.

Additional appointment

S39(1)(b) the maximum number of trustees is four.

S40(6) Appointment trustees should not exceed 4.

Appointment of court

S45(1)(a) it must be expedient for a substitute / the circumstances render necessity of courts
intervention. Chin Chee Kow v Peguam Negara Malaysia – Not all time the court will intervene, the
matter must be expedient for the court to assist.

S45(1)(b) court may exercise its power when trustee is sentenced to a term of imprisonment, trustee is
mentally disordered , trustee has unsound mind, trustee is bankrupt and corporation is in liquidation.

Re tempest – the court in appointing trustees have to consider the wish of settlor, the beneficiary
interest and the effective execution of trust.

- Bankruptcy case Re Wheeler and De Rochow - nominee was entitled to appoint trustees in
specified circumstances, including the occasion when a trustee became ‘incapable’ of acting. One
 of the trustees became bankrupt. The court decided that this made him ‘unfit’ but not incapable of
acting as a trustee.
- Mental disorder case Re Lemanns’s trust - The case concerned a trust declared in the will of
Frederick Lemann who appointed his wife, Harriet, to be a trustee. The trust provided that a
new trustee could be appointed if any trustee was ‘incapable to act’. Harriet had become
incapable of acting as a trustee, due to old age and consequent infirmity. She was physically
unable to sign a document appointing a new trustee. Chitty J held that she was incapable of
acting and that, as she could not appoint a replacement trustee, it was expedient for the court
to do so in her place.

In conclusion, the various ways of appointment of trustee provided under TA is in line with the maxim “a
equity will not fail to want of a trustee”. Thus, even the initial appointment by the settlor and initial
appointment bcms incapable to act as trustee, subsequent appointment can take place to execute the
trust.

Unfit – defect in character – eg: bankrupt

Incapacity – physically incapable – mental illness

Re solicitor – bankrupt then court can appoint trustee.

S43 of TA –retire … the court will appoint new trustee

Liku/diku daeng case

Court inherent power. (remove trustees)

Lecturer ans:

 2 occasions when it may be necessary to appoint trustees:-

(i) On the creation of a new trust – whether inter vivos or by will

(ii) During the continuance of an existing trust, either in replacement of a trustee or as an additional
trustee

- Equitable maxim – save the trust

Content:
S40(1) –(a)&(b)
*re brookbank
S40(2)
S40(3)
S40(4)
S40(5)
S40(6)
S40(7)
S43 !!!
 S.43 TA 1949 allows a trustee to be discharged from the administration of the trust by
execution of a deed of retirement and with the consent of his co-trustees.  Where a trustee
retires, s.43 TA 1949 requires at least a trust corporation or two trustees to act as trustees to
perform the trust. The settlor usually appoints the first trustees inter vivos where the trustees
are parties to the deed creating the trust, in the trust instrument. If the persons appointed
refuse to act then the bene

Where a trustee retires, s.43 TA 1949 requires at least a trust corporation or two trustees to act
as trustees to perform the trust. The settlor usually appoints the first trustees inter vivos where
the trustees are parties to the deed creating the trust, in the trust instrument. If the persons
appointed refuse to act then the beneficiaries may act if all of them are sui juris and are all fully
entitled to the trust property.
 If the beneficiaries cannot appoint for one reason or another, then the court will
appoint as in Bhikku Daeng v Maung Shwe Tye [1980]

S45
S.45 TA 1949 enacts the sweeping power of the court to appoint new trustees either as
replacement or as additional trustees.
 The most popular occasions when the court’s discretion may be exercised are where a
sole surviving trustee dies intestate, or where an appointer is incapable of making an
appointment because of being a minor, or where all the trustees of a testamentary trust
predecease the testator or where there is friction between the trustees.

Re tempest
Alkin v Raymond

Removal of trustees – court inherent power letterstedt v broers

Conclusion