Appointment, Removal, Retirement and Control of Trustees

Jenna made a declaration of private trust where she named her cousin, Lucy and Brenda as a
trustee. The trust was made in favour of her son George and daughter Georgia.
It is stated in the instrument that in the event where any of the trustees lost capacity or by any
reason, no longer able to perform as a trustee, another appointment shall be made. She gave the
power to appoint to her aunty Rena to appoint.
2 years later, Lucy died. However, Rena refused to exercise the power vested on her by the
settlor, Jenna hence she has breached the fiduciary duty as a trustee
a) Advise the parties.
Whether Aunty Rena has exercised the powers as a trustee conferred by Jena for the
best interest of the beneficiaries
Whether Aunty Rena has breached her fiduciary duty as she did not exercised her
standard of care to George and Georgia
Whether Rena can exercise her power of appointment based on s.40(1)(a) Trustee Act
1949 ?
In our situation, the subsequent appointment of trustee is done by way of express provision
due to the death of Lucy as the original trustee. A person could also be a trustee by
implication of law or by operation of law
This is supported by s.40 (1)(a) of the Trustee Act 1949, where a trustee is either original or
substituted and whether appointed by a court is dead, the person or person nominated for the
purpose of appointing new trustees by the instrument, if any, creating the trust; or may, by
writing, appoint one or more other persons (whether or not being the persons exercising the
power) to be a trustee or trustees in replacing the place of the trustee which has died.
According to Re Whiteley, the duty of a trustee is not to take such care as a prudent man
would take if he had only himself to consider, the duty is rather to take such care as an
ordinary prudent man would take if he were minded to make the investment for the benefit of
other people for whom he felt morally bound to provide
Section 28 Trustees Act 1949 provided that trustees may instead of acting personally, employ
or pay an agent to transact any business or do any act required to be transacted or done in the
execution of trust. S. 30 stated that a trustee intending to remain out of Malaysia for a period
not exceeding fourteen days may, by power of attorney, delegate to any person the execution
or exercise during his absence from Malaysia of all or any trusts, powers and discretions
vested in him as such trustees, either alone or jointly.
In S. 23(1), when 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.
According to Re Vickery, an executor defendant employed a solicitor who, unknown to him,
had at a time been suspended from practice and who later absconded having received money
belonging to the estate. The court held that, having applied S. 23(1), the defendant could not
be liable since the mistake was one of the judgments and no more, the loss was not
attributable to the defendant’s willful default.
Section 40(1) provides that power to appoint may be exercised by Person nominated for the
purpose of appointing a new trustee or If no such person is able or willing to act, then by the
surviving trustee or his personal representative. - If these person refuse to act, then
beneficiaries may act if all of them are sui juris & all fully entitled to trust property.
In conclusion Rena has breached the fiduciary duty

b) Assuming that Rena agreed to appoint, and appointed Matthew as the new trustee,
Jenna’s best friend during her lifetime. However, both of the beneficiaries, George and
Georgia opposed to the decision. Discuss.

The Issue Is Whether George And Georgia Can Apply To The Court For The Removal
Of Trustee As The Court Has Inherent Jurisdiction To Do So.
Section 45(1)(A) – Court Has Power To Appoint New Trustee To Substitute Or Add
Trustee Whenever It Is Expedient To Appoint New Trustee & Found Inexpedient,
Difficult, Or Impracticable To Do So Without Assistance Of Court. –
Section 45(1)(B) – Without Prejudice To Power Under Section 45(1)(A) Court May
Make An Order To Appoint New Trustee, If The Trustee Is:

The Court Need To Have A Clear Ground For Removal In Cases Where A Trustee Is
Ignoring One Of His Duties Because Sometimes In Some Ctc Though It Will Not
Constitute Breach Of Trust.
If Matthew Has Failed To Perform Any Of His Duties Of A Trustee, Then Georgia And
George Can Ask The Court To Remove The Trustee.
The court can remove a trustee, where he refuses to execute the trust