Funds Investing

If the unit trust deed directs the trustee or the manager to obtain the advice of a certain person on certain matters, such advice will often be construed as a condition precedent to the exercise of the substantive power in question. Obvious examples are the requirements of legal advice, valuation, and actuarial advice.

The powers of appointment of such advisers are fiduciary powers and therefore not delegable. However, this does not preclude the trustee from making enquiries, seeking information or asking for a character reference about a potential adviser so long as the ultimate decision is its own. In making this selection, the trustee or the manager must exercise due care and diligence. Read the rest of this entry »

It is established that the powers of the manager are not delegated powers derived from the trustee; the manager is a primary source of authority, having been responsible for the set up of the unit trust. However, despite this stated position, it is submitted that the trustee has reserve powers incidental to its status as a trustee by reason of its legal ownership of the properties and equity’s imposition of duties on such an owner. The position appears to be that if the manager cannot find authority for a particular act in the express or implied powers of the unit trust deed, the manager cannot do the act. The unit trust deed is the source of the manager’s authority. Read the rest of this entry »